My House Is Tired... What Renovations Have the Best ROI?
The point at which people fall in love with a home is significantly impacted during the first impression phase when they hit the driveway and lay their eyes on the home for the first time. In fact, research reveals that within just 7 seconds a person will form an opinion, and begin making judgements, about what they are seeing. The same applies to first impressions of people if you’re wondering!
This is why, in real estate, a home’s exterior is strongly linked to its value. What a home buyer sees in those first seconds will frame the value given to the other parts of the home. A nice, well kept home with fresh paint, colorful garden, and maybe new garage doors will be the reference point for the rest of the tour. In this context, some interior issues can be overlooked (or seen as less important) based on the strength of that initial feeling that made the buyer say, ‘I like the look of this house’.
According to the 35th Annual Key Trends in Cost vs. Value report by Zonda, exterior projects provide the greatest return for homeowners. In fact, eleven of the top twelve remodel projects in terms of ROI in their report were exterior projects. This is why replacing things like garage doors (#1 in the report), vinyl siding, and windows can provide a better return on a renovation than some interior projects such as a minor kitchen or bathroom remodel, which can be expensive yet do not always provide a return equal to the cost of the remodel. Kitchens and bathrooms are also very subjective, meaning that beauty is in the eyes of the beholder and what one person sees as a nice, cool look, can turn other people off.
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Obviously, interior updates are important, and like exterior projects, some provide a bigger bang for the buck. One interior project that falls into the first impression category is hardwood floors. Separate from the Zonda report, the 2022 Remodeling Impact Report for the National Association of Realtors, found that refinishing hardwood floors provides a 147% return, while laying new floors gives you a 100% return. Hardwood floors are one of the first things people notice as they step into a house, and immediately, they attach value to the home based on the floors. So, refinishing the floors or laying new ones, is a good project for adding value to your house. ?Below is a mixed list of renovation projects from the two reports and their estimated returns.
Home appearance has become more important today as the market has swung and buyers expect more and are more scrutinizing. Sellers are now being asked to spend money on upgrades and repairs that can play a big role in determining whether the home is sold or stays on the market. If there is a limited budget (and there always is) for home renovations, then focusing on the ‘First Impression’ projects that have the wow factor may help you get the most out of what you have, to spend.?