If you own a home, you’ve probably asked yourself at some point: What upgrades will offer the best return on my investment if I decide to sell?
If this is you, it’s important to keep in mind that there are plenty of costs associated with projects, and those expenses will eat into the return on your investment, cautions Mia Klarich, a real estate agent with Windermere Real Estate. Most projects cost enough that you won’t recoup your full investment when you sell the home, she says: “You’ll probably end up even or short.”
Indeed, this year’s edition of the Cost vs. Value Report, an annual survey published by Remodeling magazine, found only two popular projects that it considers likely to earn back their full investment in the Seattle area: manufactured stone veneer (an average of 118.5% of cost recouped) and garage door replacement (average 106.6% cost recouped).
But there are factors besides money to consider when weighing your home improvements. Unless you’re planning to sell your home immediately, you’ll be living with whatever upgrades you make for a while. Making your home into a place you enjoy is a worthwhile investment in itself.
“We all have a fine line to walk” between updating for enjoyment versus monetary return, says Kate Touhill, client care coordinator at the local firm Seattle Staged to Sell and Design.
Klarich notes, though, that any home upgrade you want — “unless you’re making an insane style choice” — will probably be something future buyers will want, too. “If you want to live in and love this home, go for it,” she says.
Peter Davis, founder of the Mercer Island-based renovation firm Peter Davis Builders, agrees — and he adds that even if a given project doesn’t necessarily recoup its monetary outlays, it can still benefit you when it’s time to attract buyers.
You get two benefits from updating your home the way you want, Davis says: “One is that it’s customized to your way of living,” and even if it doesn’t improve the sales price, it certainly makes it easier to sell.
National data collected by the Seattle real estate company Zillow backs that up. According to Alex Lacter, a Zillow communications specialist, “Those who make at least one improvement are more likely to sell their home above their list price than sellers who don’t make any improvements — 23% versus 17%, respectively.”
With those factors in mind, here is some advice from experts on what projects to tackle if you’re looking for a solid return on your investment.
Within the home, Davis recommends focusing on two areas where residents tend to spend a lot of their time: kitchens and bedrooms.
“I think those are the two areas that prospective buyers look at,” Davis says. “I think kitchens are probably No. 1, with master bedrooms behind, at No. 2.”
His company’s projects often include creating open kitchens, updating cabinetry, moving walls and combining multiple smaller bedrooms into a master suite, he says.
Touhill echoes Davis’ advice on kitchens, and adds that bathrooms are a good spot for upgrades. “Kitchens and bathrooms are two of the biggest places where you can update and have that come back to you,” she says.
Touhill notes, however, that expensive updates typically don’t recoup their full cost. So if you’re focusing on maximizing your monetary return, she suggests making your kitchen or other update a relatively modest one. (The 2020 Cost vs. Value Report found that a minor kitchen remodel in the Seattle area recoups 89.1% of its costs, on average.)
But home updates don’t have to involve major renovations. Plenty of smaller projects can add to your home’s value, and since their cost is typically lower, they’re likely to bring a greater return on your investment.
Both Touhill and Klarich recommend taking steps such as refreshing the interior paint and modernizing the lighting fixtures; both projects can offer significant return on investment, they say. Klarich also suggests installing new countertops, while Touhill points homeowners toward switching out the taps in the kitchen and bathrooms.
Davis says adding a skylight can be an excellent update. He also suggests installing French doors, which he says “extends the interior space almost to the outside.”
“That’s a relatively simple thing to do that could really improve the feel of the house,” Davis says.
If you’re focused on getting the best financial return possible, look to the outside of your home.
The 2020 Cost vs. Value Report found that most of the upgrades offering the best return on investment for the Seattle area are exterior projects. In addition to manufactured stone veneer and garage door replacement, the report rated highly updates such as a wooden deck addition (95.1% of costs recouped), fiber-cement siding replacement (94.9% of costs recouped) and new vinyl windows (89.5% of costs recouped).
Klarich thinks decks and patios are even more valuable than the Cost vs. Value report indicates, especially in our often-soggy region.
“You’re making your outdoor space a gathering spot,” Klarich says. “It turns our Seattle mud pits into something that can be a living space.”
A livable outdoor area is especially valuable these days as we spend more time at home during the pandemic. Klarich says she’s seeing people across the country moving out of apartments and into single-family homes, seeking extra space and achieving the goal of “having a little piece of land.”
Instead of going out to eat, she says, “Now we’re having people over for al fresco dinners.”
Touhill adds, “Everybody loves outdoor space, especially when we can’t leave our homes.”
Making that outdoor area look beautiful and inviting is especially important if you want to attract buyers — not just for the sake of curb appeal, but also because amid the current restrictions on in-person showings, it’s crucial to have excellent photos on your listing.
“Curb appeal is the first impression — exteriors are featured first online,” Klarich says. “You’re really thinking about the photo, because everyone engages with the photo first on their apps. Right now, there’s no open houses, and everyone’s engaging online.”
Even if you have just a little outdoor area, Touhill says, highlighting a place where you can read a book, have a drink, enjoy some fresh air and relax without a mask is going to be attractive.
And even if you live in a condo or other home that doesn’t have its own yard, don’t discount any outside spot you do have. If you have a balcony, Touhill says, you can improve it significantly by spending a few hundred dollars on outdoor furniture, flower boxes, plant stands and the like. “It doesn’t have to be anything crazy,” she says.
When you envision home projects, there’s a good chance you think first about flashy, decorative upgrades. Maintenance projects might seem mundane by comparison, but they can have a big impact on your home’s eventual sale price.
A roof that’s new or recently replaced, for example, can be very attractive to prospective buyers, who may be relieved to learn they’re unlikely to have to pay for such a big-ticket item anytime soon. Similarly, if your basement is flood-prone, your furnace is old and creaky, or your house has knob-and-tube wiring, investing in upgrades will be well-received by future buyers.
Keeping up your home is hugely important, according to Klarich. “The dilapidated homes are really struggling right now, because most people just don’t have the cash flow” to fix them up, she says.
Touhill adds that purchasing a house that requires a lot of work would necessitate bringing a lot of people into the home to carry out that work — something buyers are trying to avoid during the pandemic.
“They do not want a fixer-upper,” Touhill says of current home buyers. People “want to feel comfortable in their own little home bubble,” she says.