For the Harveys, who hired Case to redo their home, their expenses were quite high at more than $600,000, but considering that the home has since been appraised at a cool $1.5 million, the costs were not outrageous. Moreover, the couple didn’t renovate just to flip the property; they wanted to create the ideal setting in which to raise their son. “Don’t price yourself right out of the market,” advises Christine. “We’re now at the high end of the neighborhood, but we did it with the long-term in mind, knowing we’re not going to move for a while.”
To determine a reasonable renovation budget, figure out how much equity you have in your house. If you’ve been living there long enough to build up significant equity, you’ll have more leeway. On the other hand, if you’ve been in your home only a couple of years and taken out 90% or even 100% financing, you won’t have enough equity to work with and will likely need to scale back your plans.
To-Do List: Four smart renovations
So you’ve lined up your finances and now you’re ready to renovate. Where do you begin? Real estate experts say the following four areas bring enjoyment, increase property values, and get potential buyers to sign on the dotted line.
When picky buyers drive up to your open house and don’t like what they see, they keep moving — especially in these times, when it’s a buyer’s market. “We’re now seeing a lot of renovation shift to the exterior: new siding, new windows, new landscaping,” says Foreman. “After all, that’s your first impression.” Indeed, unsexy projects such as siding replacement can recoup up to 88% of the costs upon resale; window replacements recoup up to 81%, according to Remodeling magazine’s annual Cost vs. Value Report. And landscape design can power up your home’s value by as much as 12%, according to the American Society of Landscape Architects.
This part of the home is the perennial champion of home renovations. Even bargain hunters now feel entitled to an island, granite counters, and stainless steel appliances. “That’s the big one,” says Leonard Woods, a board certified consumer/commercial law specialist with Austin, Texas-based Davis & Wilkerson, a law firm that has represented scores of remodelers and homeowners over the years. “All buyers I’ve ever met imagine themselves in that space most of all.” The kitchen’s importance is born out in the analysis contained in the Cost vs. Value Report: You’ll recoup 83% of the cost of even a minor kitchen renovation.