The value of Home Improvements

While home improvement projects add value to your home, if you undertake large renovations, it could be a challenge to recoup your costs when it’s time to sell. In December 2003, the National Center for Real Estate Research released a detailed analysis of property characteristics and selling prices. The report cautions that “homeowners must be keenly aware of the trade-offs when making remodelling decisions, especially if these renovations are done in anticipation of selling the home.”

What impact do various renovations have on your home’s value? The study has some interesting findings:

• Exterior features that affect selling price most are a patio and sprinkler system.
• Houses with vinyl and aluminium exteriors sell for about 4 percent less than houses with brick, while houses with stucco and wood exteriors sell for about 9 percent more.
• Internal features that add the most value are a family room, dining room, whirlpool, and security system.
• A laundry in the basement decreases value by 2 percent.
• Fireplaces have a strong, positive effect on selling price with each fireplace adding about 12 percent.
• Floors that are wood, tile, or a combination of those add the most value.
• Kitchen features that are most valued are a built-in refrigerator, kitchen island, and double oven.
• In climates with hot, humid summers, central air conditioning adds about 12 percent to price.
• A sitting area in the master bedroom increases price by 8 percent.

Simpler strategies to put your home in its best light are basic clean-up, adding a fresh coat of paint, replacing carpeting, tidying landscaping and updating fixtures, windows, and doors. Consider completing deferred maintenance, such as fixing driveway cracks and damaged fencing.

Make sure that renovations are consistent – if the front yard has been recently landscaped but the back yard is still a mess, visitors (and potential home buyers) will tend to notice what’s left to be done. Bear in mind that any improvements you make which are not in line with what’s been done to other homes in the neighbourhood probably won’t pay off. If you should decide to put your home on the market, concentrate on maximizing curb appeal, and leave any over-ambitious, large-scale improvements to the new buyer.