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Outdoor space is in.
That’s the feature most home buyers are looking for these days, according to real estate agents, who say the season’s stay-at-home orders have left millions of people feeling cooped up.
If you’re going to spend time and money on a home improvement project, it pays to focus on things future buyers might find valuable, in case you choose to sell one day. Projects like refurbishing a patio — or replacing a garage door — can improve your day-to-day experience in your home and boost its value too.
In fact, many Americans have spent their time at home over the past few months tackling DIY renovations. Quarterly earnings reports from big box home improvement chains Lowe’s and Home Depot both showed year-over-year improvement from 2019, even as overall consumer spending fell by record amounts amid the COVID-19 pandemic.
The upward trend isn’t just a result of recent stay-at-home orders. According to the 2019 State of Home Spending Report from HomeAdvisor, Americans spent an average $7,560 on home improvement in 2018, a 17% increase from the previous year.
Here’s how to find the right home renovation project that fits your budget, makes you happy — and would make a future buyer happy, too.
Deciding on a Project
As you determine what projects to take on, consider those that will bring you the biggest returns on your investment if you decide to resell.
You don’t have to spend thousands of dollars or dedicate months of work on pricey renovations to increase your home’s value. Even small DIYs can have a significant impact when it’s time to list.
The best way to get the most return for your money is by focusing on where you spend the most time, such as the kitchen. That’s where potential buyers will likely spend their time, too, and will pay the most attention while viewing.
According to the 2020 Cost vs. Value Report from Remodeling Magazine, an industry trade publication, renovations that saw the most significant costs recouped upon a home’s sale include minor kitchen remodels (78%), siding replacement (78% for fiber-cement and 75% for vinyl), and wooden deck additions (72%).
|Project||Average Cost||Average Value at Sale||Cost Recouped|
|Manufactured Stone Veneer (Exterior)||$9,357||$8,943||96%|
|Garage Door Replacement||$3,695||$3,491||94%|
|Minor Kitchen Remodel||$23,452||$18,206||78%|
|Siding Replacement (Fiber Cement)||$17,008||$13,195||78%|
|Siding Replacement (Vinyl)||$14,359||$10,731||75%|
|Window Replacement (Vinyl)||$17,461||$12,761||72%|
|Deck Addition (Wood)||$14,360||$10,355||72%|
|Bathroom Remodel Midrange||$21,377||$13,688||64%|
|Major Kitchen Remodel Midrange||$68,490||$40,127||59%|
|Master Suite Addition Midrange||$136,739||$80,029||59%|
Personal Tastes: A Balancing Act
According to Will Rodgers, a real estate agent based in Virginia, it’s OK to get a little creative with your design choices. Just don’t go overboard.
“Don’t put something in that you’re going to hate,” he says. “But don’t put in something so unique that it’s going to turn 90% of buyers away.”
Reach out for a second opinion from a friend or neighbor before choosing anything drastic or highly custom, such as dark tiles in the bathroom or several bright paint colors.
“You want to find the sweet spot: something you enjoy that reflects your taste but is not so custom and loud that it turns buyers off in two or three years,” Rodgers says.
Before you head to your local home improvement store or call your contractor, consider these projects to help boost your home’s value when it’s time to sell.
As many Americans prepare to spend more time at home long-term, either due to extended social distancing or changing remote work circumstances, outdoor space is more appealing than ever.
“The top features home buyers want in the age of coronavirus are a quiet property or neighborhood, followed by more outdoor space, such as a yard or patio,” says Andrina Valdes, executive sales leader and COO of Cornerstone Home Lending, Inc. in Texas.
Whether you’re working with several acres of land or just a couple hundred square feet of balcony space, spending your renovation resources on outdoor living space can make a significant difference for potential buyers.
Some examples may include updating light fixtures, improving railings on the front porch, installing an outdoor ceiling fan to keep cool, or even an outdoor fire pit or fireplace for your backyard. For bigger renovations, home additions, new porches, and fence installations remain popular choices, according to the State of Home Spending Report.
“A lot of people spend the most time in the kitchen, and I think it’s the best value dollar for dollar,” Rodgers says.
According to the 2019 Remodeling Impact Report from the National Association of the Remodeling Industry (NARI) and the National Association of Realtors (NAR), real estate agents ranked “complete kitchen renovation” and the less-expansive “kitchen upgrades” as the two projects most likely to appeal to buyers and bring the most resale value to a home.
In fact, 20% of real estate agents say completing a kitchen upgrade played a part in closing a home sale.
Remodeling a kitchen can be an expensive undertaking, but there are ways to complete the project on a budget while still adding value.
“Gutting and doing expensive remodels will never give a seller a dollar-for-dollar profit,” says Deborah Baisden, a real estate agent based in Virginia. “Paint cabinets, put in new countertops and appliances, take down wallpaper, and paint trim.”
And don’t forget about smaller changes to make a big difference. Changing light fixtures and cabinet knobs can have an impact on your space for comparatively little impact on your budget.
Beyond the kitchen, the place a potential buyer is most likely to value an upgrade is the master bath.
The Remodeling Impact Report suggests you can recover 50% of the resources spent on a master bathroom remodel upon the sale of your home.
Recouping value can be especially dependent upon how much you account for potential buyers in your design choices for both kitchen and master bathroom renovations.
“Certainly, there are design trends that have wide appeal among a range of homeowners,” the Cost vs. Value Report from Renovation Magazine states. “But because of the vast differences in aesthetic tastes, one person’s elegant new kitchen or bath will be viewed by a range of other prospective buyers as tacky and outdated and in desperate need of a reset.”
Consider a neutral color scheme (think white or light gray), updated fixtures, and popular trends like subway tiles for broad appeal.
According to the Remodeling Impact Survey, flooring is one of the best ways to recover costs by adding value. The survey suggests homeowners who install new wood flooring could recoup 106% of what they spend in increased home value, while refinishing hardwood floors could recover 100% of the cost when it’s time to sell.
If you don’t have hardwood flooring already and aren’t quite ready to commit to the cost of new wood installation, consider vinyl or laminate alternatives, according to Rodgers.
“It looks like real wood, but it’s super scratch-resistant, unlike wood,” he says. “For the general home buyer, it’s more economical, it’s more durable, and it’s mostly waterproof, which is nice.”
If you already have hardwood floors, consider waiting to refinish them until you’re closer to a list date, as they can easily get scratched up or worn again.
Clean and declutter
It may not be the most exciting project on your list, but completing a thorough deep clean and declutter of your home is a great place to add value.
Clear out each of your closets and drawers, donating any items you no longer need. You can even try to earn a few bucks in the process by listing items on sites like Craigslist, eBay, or Facebook Marketplace. Localized resale apps, such as Letgo, OfferUp, or VarageSale are also great options.
Then work on cleaning harder-to-reach places attentive buyers may also examine, such as the baseboards or inside the oven.
“Walk through the house with a critical eye and see what your eyes are drawn to,” Baisden says. “If the home is too full of the current family, a new family will not be able to see themselves in it. Start packing things away and consider having a stager in to help advise.”
If you’re planning on listing your home anytime soon, you’ll thank yourself for getting rid of things you don’t need in advance of the moving process, and presenting a clean, organized space to potential buyers can be key to scoring a deal.
“We cannot help but judge a book by its cover,” Rodgers says. “When a buyer is walking up, and they’re seeing the grass isn’t cut, and the plants are all overgrown, they make that judgment instantly.”
Your home’s curb appeal is its first chance to make a good impression on a potential buyer — or leave them with a bad taste in their mouth from the start.
“Freshly mulched and edged flower beds and a well-manicured lawn will make the phone ring for showings,” Baisden says. “Stand at the front door and look at the porch for missing mortar or cracks. Is the door freshly painted and a pleasing color? Is there room for a burst of color in pots on the porch or in the flower beds? Are there spider webs?”
The impact a first impression makes on a potential buyer is critical and can influence the price a buyer is willing to pay for your home or even the closing of a deal altogether.
Repairs and updates
Minor repairs make for a productive but relatively inexpensive weekend project that easily adds value to your home.
Look for small things easy to overlook when you’ve lived in your space for a long time: cracked windows, holes in walls, doors that don’t quite close all the way.
According to the Cost vs. Value Report, of 22 projects evaluated, several minor renovations were among those that saw the most value recouped when it came time to sell, including garage door replacement (94% recouped), window replacement (72%), and entry door replacement (69%).
These small repairs (in addition to bigger repairs like a new roof or siding) are signs you’ve maintained your home well over time.
Buyers are looking for a space that’s been taken care of, not left in disarray or damaged, and preparing a home completely move-in ready can have real value.
Another emerging trend among buyers that can help you decide where to devote your resources is efficiency.
The most recent What Home Buyers Really Want Report from the National Association of Home Builders shows, among home buyers surveyed, 89% ranked Energy Star windows as either “essential” or “desirable,” while 86% said the same about Energy Star appliances. Eighty-one percent of home buyers said it was essential or desirable for their entire home to be energy efficient.
According to data from Energy Star, the average American household, which spends $2,000 annually on energy bills, can save about $575 or 30% each year by switching to energy efficient products. In addition to saving you money on utility bills in the short term, an already energy-efficient home can be a great selling point for buyers, especially those who may be debating between new construction (which is more likely to have efficiencies built-in) and an older home.
Do Your Research
“Go find a new construction community and walk inside,” Rodgers says. New home builders “spend a lot of money and time investing in figuring out what people want and what the latest trends are. They can buy any materials they want, so they take time to figure out the right ones.”
Don’t just spend your research time on design trends, though. Scrutinize your budget too. Make sure the changes you want to make fit within your means, without enough left over emergency savings. You can’t rely on potential resale value to fund your investment in a project; this mindset could lead to debt and negative effects on your credit and overall financial health.
If your project can’t be completed with your current savings, consider postponing it until you have a bit more to spend on the things you really want, or find ways to reduce costs in a way that will still leave you (and a potential buyer) satisfied with the final result.