Should I Renovate My Home ?
Is it worth it to renovate my kitchen or bathroom? This is one of the most asked questions we receive from homeowners when appraising their homes. Quite often, this question comes up before an owner puts their home up for sale, thinking it will sell for much more if updated.
While it is true a home could sell for a higher price if these renovations are done, that doesn’t always mean they should be done. If you’ll be hiring a contractor, the cost may be prohibitive. Much of the cost of renovations are in the labor, and the increase in the home’s worth will probably not go up enough to cover this cost.
In simple terms, it’s usually a bad idea to undertake a large renovation if you’re doing it to solely make money on it. If you are doing the work yourself, it could be worth it, depending on the quality of materials used, and how much you pay for those materials. There is a large difference in price between a standard upgrade with formica counters/basic cabinets and a higher quality upgrade with granite counters/cherrywood cabinets. Did you pay retail or wholesale for the materials?
Advice from an NJ home appraiser: Whether considering a renovation before selling, or because you think the value of your home will be worth more in the future, don’t do it strictly from a profit motive. Typically, you won’t gain more in appraised value than the cost to renovate. Rarely, if ever, does the home value increase dollar per dollar on what you spent. Besides labor, there are costs of financing the project, including interest. Also, your tastes in colors, styles, and materials could be quite different from someone else. Prospective buyers may like that you have an updated kitchen, but don’t particularly like light oak cabinets and a cream colored floor. They may like darker colors, or a different style floor tile. We all have different tastes. It may not be worth to them what it is to you, especially if they want to make changes to make it more to their liking. Renovate because you want a fresher, more modern home, are financially in the position to do it, and look forward to enjoying the update yourself while you and your family are living in the house.
Look for tips on how to make a home more marketable in a future blog.