Return on Investment for Sellers

Clients often ask me which home renovations, remodels and improvements will add the most value to their home when it comes time to sell. More accurately, the question is: which projects will provide the best return on investment (ROI). I have opinions, of course. But now I have some facts to back those opinions up.

 

In the January issue of Realtor magazine, an article entitled “Small Projects, Big Bang” summarizes the results of the Remodeling Cost vs Value Report 2009-10.  The report outlined a number of different home improvement projects, costed them out in different metropolitan areas around the US and calibrated a percentage ROI on each one. There’s a lot of detailed information in the article (and helpful hints on smaller projects) but here’s my summary for the Portland market:

 

With so many wonderful older homes on the marker here, it is well worth investing in the following infrastructure upgrades for your home. Buyers and their realtors are always going to value:

•  new plumbing

•  a good sewer connection

•  new or upgraded electrical system

•  an energy-efficient furnace (not oil)

 

An investment in siding had a really high ROI (92% in our area). Costs averaged out at just below $14,000 but with that ROI, it is certainly an investment worth considering.

 

Improving the basement also came in with a high ROI. And this can be a simple matter of sprucing up what’s already there. New flooring, a coat of paint, and new lighting fixtures could make a big difference and there may be no need to delve into plumbing or dry wall.

 

Curb appeal has always been important. A little front yard landscaping can go a long way to making a good first impression on buyers. However, you might also want to give your front door a good look. Replacing the front door with a mid-range product (approximately $1200) had the best ROI of all the improvements at 128%.

 

Several of the most worthwhile improvements are, not surprisingly, centered on the kitchen:

•  add a breakfast bar (this can be as simple as cutting an opening in a wall, adding a bar and a couple of stools)

•  upgrade the kitchen counter to granite tile (12” tile is a very affordable option compared with granite slab)

•  cabinet fronts (check into refacing or replacing doors or perhaps just the hardware)

•  tidy and organize kitchen cabinets (Yes, buyers open them so adding a roll-out tray or lazy susan can create the illusion of more space.)

•  retile the backsplash to freshen or brighten or just clean up the look of your kitchen

 

If you need any more information on remodeling or renovations, I keep a list of reliable vendors who could estimate your job for you. And I’m always happy to talk to you about plans for your home with a view to selling at a later date.  But remember, don’t make a change solely for the sake of resale. This project needs to be something that you and your family will enjoy for the length of time you live in your home.

February 17, 2010 · Filed Under Investment, Portland Data, Portland Real Estate Market Data

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    I am a Realtor with Keller Williams Realty Professionals specializing in Residential Real Estate Sales and Purchases in Portland, Oregon and the surrounding communities. I have extensive experience and knowledge buying and selling homes in the Portland area and love living here. Enjoy the site, and contact me if you have any questions regarding buying or selling a home in or around Portland!

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