Whether you are an investor looking to flip or a new homeowner settling into new abode, chances are you’re looking to do some sort of renovations. Many people think the bigger the project, the bigger the return. However, you would be mistaken.
At Ali Safavi Real Estate we’ve experienced this mistake firsthand. Today we came across a charge put out by Remodeling magazine. that looked at remodeling costs verses value. The data mirrored returns that we’d been seeing in the market.
The jist of the data shows that high end are seeing less value and return that that of simpler upgrades. For those who remodel, the average payback in a home’s resale value is 56 percent of the cost of the remodel, but for those who replaced things like garage doors or windows, the payback is a much higher 75 percent. That is according to real estate professionals surveyed by the magazine.
Outdoor upgrades are among the biggest returns among renovations, most likely because of the curb appeal. Projects like a full kitchen remodeling saw some of the lowest returns. Minor kitchen remodels pay an 81 percent return, while major high-end kitchen remodels just 59 percent. Why? Well, like many of these elements it comes down to taste. You’re eye for design may, unfortunately, fall short of what the market wants. In that case you’ve way overpaid for an upgrade that had a simpler solution all along.
So what’s the solution? At Ali Safavi Real Estate we always recommend doing your research before investing. Use the chart in this article, research trends, and always make sure to shop around to make sure you’re getting the best price.
Some information from this article was taken from this CNBC article.
Make sure to check out the other articles on this site for information on real estate investing!