As we approach the end of our two year full-home renovation many people ask us, “why did you do this?” and/or “why did you not do that?” For example, we did not finish our basement, make our first floor open concept, add a wine cellar (which we briefly discussed), or enclose part of the back deck for a sun room. We did however fully update the kitchen, add an extra bathroom and a half, re-side the exterior, fix the back deck and update the plumbing and electrical throughout.
With a hefty budget and lots of creative ideas – the sky is the limit when it comes to renovating an old house, so much so that deciding what projects are ‘worth it’ and what projects aren’t can be difficult decisions. I fully understand why people ask, “so this half bath, why did you do it?” or “why not knock out the wall going into the kitchen to make it bigger?” For us, at the end of the day, this house is an investment and the answer is always, “ROI (return on investment) is why.”
Yes we love this house, but it’s not our forever home. (Quietly, I’ve already started peeking around the neighborhood to see what our next project might be.) And since we don’t plan on living here forever, we have had to keep in mind what future buyers might be looking for. And of course we’re always asking the question, ‘upfront costs verses eventual payout – what makes the most sense?’ Here is a quick look into how we figured out what projects got the green light.
To get a general idea of what projects pay off and what ones might not, I recommend looking up the Remodeling Cost vs. Value Report which is published every year and breaks down results by region. Stack this up against what you can afford, comps in your neighborhood, and what you’d like to see in your own house (assuming you’ll live there for a time).
According to this report the best project for long-term ROI is replacing an entry door (a project we have slated for this summer), followed by updating siding, kitchen remodels, garage door upgrades and a deck additions. We have done all of these except for the garage door upgrade since we, sadly, have no garage. Other good investment projects include adding a backup generator, attic bedroom additions, window replacements and bathroom upgrades/renovations.
Projects with the lest return on investment for 2014 included adding home offices, sunrooms, wine cellars, living rooms, and bathrooms. But wait, we added a bathroom! Again, this is where looking at comps in your area is important. Because our house was so old it only had one bathroom, but buyers nowadays want ensuite bathrooms off their master bedroom and powder rooms for guests. Since our house lacked both and most updated houses near us had at least one or the other we thought it would be a good idea to add them.
No one ever said deciding where to spend your renovation dollars was going to be easy!
Don’t have it in your budget to add a bathroom or do a total kitchen overhaul? That’s ok. Other, less involved, renovations that pay off in the long run include:
- Flooring upgrades. Vinyl is out and hardwood is in. People often think hardwood is expensive, but it doesn’t have to be. Engineered hardwood comes in a wide range of price points and it ALWAYS looks better (i.e. sells faster) than broken tile or dated vinyl.
- New siding. Vinyl is more efficient and less maintenance than wood. Hardy backer (a cement-based siding option) is more durable than vinyl. You have lots of options in this department. Just keep in mind that people want low utility bills, and a low maintenance exterior. They also like warranties, just in case.
- Painted ceilings and walls. No one likes popcorn ceilings (or textured walls, trust me). They also don’t like dated wallpaper or 1970s wood paneling. A couple hundred bucks and some elbow grease solve many of these buyer hold-ups – and I promise they’ll pay out in the long run.
- Kitchen improvements. You don’t have to completely rip out your old kitchen to get renovation bang for your buck. Try painting dark cabinets white (bright kitchens are in these days) or upgrading your countertop. Even just adding a tile backsplash or new hardware can modernize a dated kitchen. And don’t forget the appliances – if you touch nothing else, adding stainless appliances often goes a long way towards swooning potential buyers.
- Updating a bathroom. Adding a whole new bathroom is expensive and often unnecessary, but updating an old one is a smart move. The national average of recouped cost is more than 100% for updated bathrooms. New floors, fixtures and lighting really resonate with buyers. So out with the dated brass and in with modern brushed nickel or polished chrome.
- New decks. People LOVE outdoor spaces and you don’t have to build a full-blown outdoor kitchen to impress buyers. Simply adding a deck where there wasn’t one or repairing a falling apart old one will pretty much guarantee a good ROI. This is also a good DIY project for novice renovators which can save you a bunch of money up front.
- Updated utilities. An almost universal truth – people don’t want to spend money on new wiring, plumbing, or HVAC. It’s not sexy, heck it’s not even seen, but trust me – trying to sell a house with a knob and tube electrical system or old rusted pipes isn’t easy. My recommendation is to bite the bullet and pay for the upgrades. Sine you went through the hassle of updating it yourself, you should see a good return when you go to sell your ‘move in ready’ home. The same thing goes for replacing old windows and getting a new roof – if you can, do it.
Hopefully that answers the often asked question of “why did you do this?” Like most things in life, it comes down to money and we feel that the upgrades/changes we’ve made to this house will one day pay off. In the meantime we’ll be enjoying them ourselves, after all, we worked hard for all of them!