ERA Justin Realty’s Joana Ilescu Reviews
Best Dollar-For-Dollar Improvement Returns
It would be nice if you could count on getting one dollar back when you sell your house for each dollar you invested in renovations. Most people hope for more than a dollar-for-dollar return. In reality, many improvements return less than the amount invested.
For example, a Cost Versus Value Report, published by a past National Association of Realtors report, and reported by Inman News, that nationally, the average percent recouped on a bathroom remodel was only 90.1 percent. It was 88.1 percent for a deck addition, 81.2 percent for a family room addition, and 79.4 percent for a major kitchen remodel. These percentages vary throughout the country and are only suggested with variations.
“Does this mean that remodeling is a waste of your time and money? No, but don’t go about a renovation in a haphazard fashion. It’s important to do your due diligence investigations before embarking on any remodel project, just as you would if you were considering buying a home. There are many variables to consider,” stated Joana Ilescu Realtor salesperson with ERA Justin Realty Co.
“First, consider that the figures quoted are national averages. The amount recouped on a remodel depends in large part on where you live. There’s significant variability from one city to the next, according to the NAR report. For instance, nationally, homeowners recouped approximately 90 percent on a bathroom remodel. But, the amount recouped for the same job was 109.7 percent in New York City, 100 percent in San Francisco, and only 61.3 percent in Denver, on average. The return on a remodeling investment will also depend on the value of your home, particularly in relationship to the value of homes in your neighborhood. If you have a small home in a neighborhood of larger, more expensive homes, you could come out ahead by enlarging your home. However, it’s important to keep costs in line so that you don’t end up over-improving your home for the neighborhood. Buyers tend to discount a home that’s priced above the value of other homes in the neighborhood. Before remodeling, it’s also important to consider your competition. In some areas, certain remodeling projects are taken for granted. For instance, if you’re in an upscale neighborhood of older homes where most homeowners have remodeled their kitchen and bathrooms, you may be penalized price-wise by the market if your home is outdated. In areas where home prices are rising rapidly, you’re likely to recoup more on your remodel investment than you would during times of meager appreciation. With this in mind, you’re more likely to recoup your investment over the long term.” Joana added.
Ron Darby, ERA Justin Realty broker co-owner added, “There’s a subjective factor that can’t be overlooked when remodeling. This factor is often referred to as pride of ownership. And, don’t discount the value of creature comfort. There’s a certain sense of well being to be derived from a home that suits your lifestyle while aptly reflecting who you are. Despite these factors, from an investment standpoint, it makes sense to consider resale value before making an investment in a major renovation. This doesn’t mean that you should remodel your home with someone else in mind. But, if you’re aim is to recoup as much of your investment as possible, it’s wise to consider home buyer preferences in your area. If your remodeling is not in tune with what buyers want, it could actually decrease the value of your home. Also keep in mind that while trends vanish quickly, quality and good taste are timeless. The NAR Cost Versus Value Report was based on professional judgment rather than on actual sales data. Therefore, the report is somewhat subjective. However, it does point out the importance of carefully considering before remodeling.”
Joana concluded, “All across the nation, one of the most coveted awards that can be achieved in business is the ‘J.D. Power & Associates’ award. Only outstanding business entities are honored and receive it. ERA Real Estate was the recipient For Highest Satisfaction for First Time Home Buyers Among Full Service Real Estate Firms.”