We’re invested in your financial future.
That means looking for ways to help you make the most of your assets and put them to work for you whenever possible. One significant asset for many people is their home—and if you’re looking to sell in the near future (any time from now to five years from now), there are ways to improve your curb appeal and bump up your asking price, without investing lots of time and money. In fact, it’s been shown that small, strategic renovations can have a huge impact on your home’s attractiveness to buyers and may make them more likely to put in an offer. Read on to find out how to make the most of what you’ve got so you’ll be confident about selling when the time is right.
Does it make sense to renovate before you sell?
If you know you’ll be selling your home within the next few years, it doesn’t make sense to make expensive renovations, but it does make sense to make smart ones. You’ll want to consider industry advice and research the costs and time required for any project before commiting.1 That said, certain areas tend to be more important to potential buyers than others: the exterior of the home (garage, siding, landscaping, deck, etc.) and, on the interior, the kitchen and bathrooms. These might be smart places to focus your energy, while bearing in mind that complete overhauls are expensive and rarely recoup their value.2 So consider instead strategic, cost-effective changes (e.g., replacing countertops or painting cabinetry), preferably changes you can make yourself to avoid the cost of a contractor or other skilled tradesperson.
“The goal of your home renovations should be to make it more livable for yourself and look move-in ready to future buyers.”
—Meghan Payntor, Budget Dumpster Presents: The Fill3
Where should you start?
It can be overwhelming trying to decide which upgrades to tackle and whether or not they’ll recoup expenses when it comes time to sell. But here are some loose guidelines to use as a jumping-off point to start your renovation projects:
1. Which minor problems can you solve easily?
Think about simple fixes. Sometimes fresh paint and new fixtures can give the kitchen or bathroom a major facelift. Consider projects you can take on by yourself, like painting the front door or window frames, replacing door knobs or switch plates or even upgrading flooring with do-it-yourself laminate. “Real estate agents often advise clients to take care of minor problems, all with the understanding that the fixes serve only to support the sale of the rest of the house.”1 Remember that the bottom line is to make the home more appealing and saleable without losing your profit.
2. Focus on appearance over function.
Don’t waste your money on big-ticket items. Now is not the time to replace the water heater or HVAC. As long as they’re functional, they won’t change your asking price. Your goal is to make your home look pleasing and livable. Focus on aesthetic, affordable adjustments that suit current tastes (rather than just your own) and make the home attractive to buyers. Again: paint is your friend.
3. Prioritize ROI and value over making the house exactly what you’d want.
Not sure how to decide which fixes are a good investment vs. which ones are a waste of money? There are resources available to help you make these decisions. The “Cost vs. Value” report is published annually and available to you, free. It is well known in the construction and real estate industries and is a handy reference for anyone considering a home upgrade. The report will break down all the various types of home improvements you could potentially make and weigh them against what you can expect to recoup. It’s an excellent resource for whenever you’re unsure whether you should plunge into a new project.4
4. Think about improvements, not just maintenance.
What counts as “maintenance”? That would be things like installing new plumbing or replacing the gutters or furnace. These may keep your home in long-term working order, but they don’t increase its value. They aren’t noticeable to buyers and they cost a lot of money. However, if you replace the windows and make your home more energy-efficient, homebuyers can appreciate this added savings over the months and years to come. If you do decide to spend some real money on a renovation, make it something that your potential buyers can immediately see or that have inherent value they can easily grasp.5
What are some smart indoor renovations?
Think about minor updates that can help your home stand out without breaking the bank. Some ideas:
1. Declutter and clean.
More often than not, emptying out storage rooms and closets and giving your home a deep clean can improve its appearance and give prospective buyers the illusion of more space. The best part? Cleaning and streamlining don’t cost much, if anything at all.
2. Open up the space.
If you’re going to renovate, invest in design that opens up the space. “In 2020, 44% of real estate agents cited ‘need for more space’ as the number one moving motivator.”6 So, if you’re going to make a change, make it one that adds to the overall sense of space—like combining kitchen and living areas into one great room, or replacing a bathtub shower with a walk-in shower.
3. Refresh major items at eye level.
Replacing your kitchen cabinets is a huge expense, so avoid this unless they’re in poor condition and must go. Otherwise, consider repainting them to give your kitchen a significant refresh at a fraction of the cost.1
4. Paint.
Once again, remember that paint is your friend. Do a bit of research into modern, popular paint colors and stick to bright, airy tones to make smaller rooms appear larger. Fresh paint has the added benefit of making your home look cleaner and more current, and it doesn’t have to cost much.3
5. Upgrade the bathroom.
Consider some minor bathroom adjustments—bathrooms are always high up on potential buyers’ lists. Again, don’t spend a fortune, but do think about tackling one project that you think you can manage yourself, like paint, new fixtures or updated flooring or countertops.3
What about outside? How can you make your home stand out?
There are a handful of manageable updates that can seriously impact your house’s appeal:
1. Maintain your landscaping.
People do tend to judge a book by its cover and attractive landscaping gives the impression that a home is well taken care of. “To mow the lawn, prune shrubs, apply mulch and plant about 60 perennials or annuals over about 2,800 square feet costs about $3,000—but has a 100% return on investment, NAR (National Association of Realtors) says.”6
2. Fix your front door.
One of the first things buyers see, the front door is often overlooked when homeowners consider easy renovations. Paint it or replace it with something brightly colored or uniquely modern, like steel or glass. A fresh look for the front door can be memorable to potential buyers.3
3. Replace the garage door.
Upgrading the garage door gives your house’s exterior a major visual boost. It’s also one of the single most cost-effective ways to increase your home’s value without blowing a lot of cash—in fact, while a garage door can cost upwards of $3,600, you’ll recoup nearly 100% of it. And it will make a great first impression.7
4. Give the facade a facelift.
One of the most effective ways to increase your home’s value and still recoup your spending is to replace the exterior siding. Yes, it can be a major undertaking (not to mention a big expense), but you can earn back up to 95% of what you spend.7
5. Touch up the paint.
If you can’t or don’t want to spend the money on repainting the entire exterior of your home, consider just touching up the problem areas—address chips and flakes, the front door and trim or pressure wash the outside to flush away dirt and mold.
Big investments can make a big impact. But be selective.
Yes, sometimes big improvements can entice a much more interested buyer and a much higher price, but it’s important to pick your projects wisely. Here are some of the higher-impact undertakings that can pay off in the most cost-effective ways:
1. Finish the basement.
Do you live in a place with cold winters? Tornados? Consider fixing up your basement. Adding areas with warm square footage can be very appealing in regions that tend to run cold or have unpredictable or uncomfortable weather patterns.6
2. Replace your floors.
Nowadays, buyers prefer a hardwood or laminate floor over carpeting. It’s cleaner and it looks more modern. If your home is drowning in dated carpet, consider replacing it with affordable flooring. “According to NAR’s 2019 Remodeling Impact Report, refinishing hardwood floors recovers 100% of the cost at resale, while new wood flooring recoups 106% of costs.”6
3. Rethink the roof and siding.
Roofing and siding can yield a considerable ROI. Granted, it can cost a bit and take some time, but the Cost vs. Value report suggests that homeowners recoup between 72% and 80% of their expenditures on these kinds of overhauls. So, again, consider the time you have and the money you’re willing to spend in order to increase your home’s resale value.8
Still have questions?
We are devoted to helping our customers achieve all of their financial goals. If you need help selling your current home or buying your next one, we’re here to assist in any way we can. Reach out to one of our advisors anytime.