Special Guest Post by North Texas Home Designer Lisa Baer
Move or remodel? Given the current condition of the housing market in North Texas and elsewhere in the country, many homeowners are finding remodeling a better option than moving. A strong housing market may be some months away, and many homeowners are considering investing in their current homes and foregoing the move. If you are contemplating an update, a remodel or are just making some basic improvements, it’s important to understand which renovation are coveted by potential purchasers and which investments in your home actually provide a return on investment.
One benefit of renovating in the current economic environment is potentially greater value for your remodeling dollar. Some new home builders have turned their focus to remodeling because of the slowdown in the new home market. At least in part, the abundance of contracting options has made remodeling bids competitive. Homeowners always have to do their homework – perhaps even more so – but when it comes to evaluating contractor pricing, competition can mean high quality work at a good price.
In my own design practice, the economy is a contributing factor in homeowners’ approach their remodeling plans. Homeowners’ will more often scale back their plans or implement them in phases over time. In my view, this thoughtful, deliberate approach often results in better long term decisions. Using an experienced contractor, designer and consulting with a local real estate professional can all contribute to a remodeling plan that will maximize your investment in terms of enjoyment and livability and also provide the best potential return.
In thinking through your remodeling options, there are typically two approaches to take. You may decide to splurge just for the pleasure of having something that you’ve always dreamed about – the steam shower, the Italian marble master bath or the professional grade stove. The other approach is the pragmatic one – replacement windows or a higher efficiency air conditioning unit. There is a great deal of middle ground between these two approaches and the middle ground is where most homeowners find themselves in prioritizing their remodeling to-do lists.
So how do you “value” a remodeling project? Value can be determined by both the enjoyment that a homeowner derives from the improvement as well as the likely return on your investment at resale. There are a lot of other factors that come into play as well. Regional differences in homeowner and buyer preferences are a large consideration. For example, a deck addition in San Francisco will recoup more that 100% of the investment, but the same deck in Columbus, Ohio is likely to recoup less than two thirds of its cost.
Before
After
A deck addition in North Texas? Don’t bother. A flagstone patio on the other hand – especially with space to eat and lounge – that is a coveted improvement. We recently removed an old, high maintenance wood deck in Keller, Texas and reworked the area with flagstone and updated the landscaping plantings. The update opened up the entire rear of the house and completely transformed how the homeowner’s use the space. By using high quality materials that have impact and longevity, this project will almost certainly add value if (when) the homeowners sell the home. (All Photos Courtesy of Baer Home Design.)
Add even a basic outdoor cooking area or a fireplace and you are talking about serious value add. Other hot buttons in North Texas and throughout the country include (not unexpectedly) kitchens and baths. We see higher end finishes – stone counter tops and stainless appliances for example – turning up in the kitchens of moderately priced homes. Baths too are becoming more luxurious with the addition of stone floors and counter tops, soaking or jetted tubs and interesting lighting.
There is one other important consideration in your remodeling plans – what will the impact of your project be on the rest of the home? A super high end kitchen may have a different perceived value if it accompanied by a master bath that hasn’t been updated in 25 years. Depending on your budget, you may choose to spread your remodeling dollars around the high impact areas.
What remodeling projects provide that combination of enjoyment and return?
According to the Remodeling Magazine’s Cost v. Value Report 2010-2011, the number one overall project was entry door replacement at over 100% of costs recouped. This small investment (an average of $1200 according to the survey) can add tremendous curb appeal to a home which translates into higher resale and reduced time on the market. From a homeowners’ perspective the front door may see a little ho hum, but never underestimate the impact of a small improvement. Pulling up to a beautiful front door or opening that door repeatedly for guests (who will naturally comment on the beautiful, new door), can provide a great deal of pleasure and pride that can be hard to assign a dollar value to.
New front doors aside, there are some home improvements that generally add value to a home and some that rarely make a difference when it comes to eventual buyer appeal and consequently, provide little return.
Paint and Wallpaper
There is no other home improvement that can change the appearance of a home as much as paint. Some estimates indicate that painting the interior of your home can return 90%, other estimates are even higher. Fresh paint can instantly update a space and can provide a clean backdrop – critical in home sale preparation. If you intend to stay in your home, paint is a great way to add personality – color can be a wonderful design tool. Explore your preferences and style as paint is inexpensive and easy to change. If you intend to sell at some point in the not too distant future, keep your color selections neutral.
Wallpaper too can be a great way to inject style into your home but today, the use of wallpaper is a slightly different story than paint. Wall coverings of any kind make a strong personal statement so use it sparingly – even if you are staying in your home for the foreseeable future. A powder room or an accent wall in a bedroom can be a high impact, low cost way to utilize wallpaper that you love and it can be easily changed if you tire of it. If you are selling, avoid wallpaper altogether. In fact, strongly consider removing any wallpaper that you currently have. Today’s buyer generally wants nothing to do with wallpaper and it only adds another chore on a purchaser’s to-do list and a long list can cause a buyer to move on to the next wallpaper-less property.
Wallpaper Before
New Look After
We removed wallpaper and did a few more updates – granite counter tops and stainless appliances – in the Colleyville kitchen pictured prior to it going on the market. Just the removal of the wallpaper changed the entire feel of the critically important kitchen and breakfast area. Buyers were wowed and the home sold quickly – even in a challenging real estate market.
Kitchens
Kitchens are the focus of most remodelers’ dreams and most well thought out kitchen improvements provide at least some return on the investment – most estimates range between 70-80%. We’ve all heard that kitchens are the “heart of the home.” Often that translates into the room that experiences the most wear and tear. Kitchens also have a lot of elements – cabinetry, hardware, flooring, etc. and those elements tend to follow style and color trends. This means that your kitchen can appear dated before almost any other room in the house.
A complete kitchen remodel may not be necessary. Sanding, painting or staining tired cabinets and replacing old cabinet hardware can make a tremendous difference in the appearance of a kitchen. If your remodel involves new cabinets and other surfaces, keep your selections simple and classic. Overly designed details not only add cost, but they run the risk of quickly dating a design.
Quality appliances and updated flooring counter tops and backsplashes are hot buttons for home purchasers. By budgeting carefully and making trades offs of some lower cost items, you may be able to afford higher priced items that are more desirable to home buyers.
Before
Updated Look After
The Keller, Texas kitchen pictured was already efficient (for the most part) but even the most well chosen kitchen elements grow tired after 20 plus years. We embarked on a total remodel – from new cabinets to cabinet hardware. By adding classic details and keeping the overall design simple, these homeowners should be able to enjoy this kitchen for years and years.
Bathrooms
Bathrooms are very similar to kitchens in that the return on improvements can be high – around 78%. If kitchens are the heart of the home, baths run a close second – especially master baths. Depending on your region of the country, a master bedroom with an adjoining bath is almost expected, even in modest price ranges. In higher end homes, separate tub and shower, double vanities and high end finishes – travertine, marble, granite – could well provide a solid return.
Solid upgrades in modest price ranges include fresh tile, paint, fixtures and lighting. Those elements can be purchased in a wide range of prices. Selecting carefully and utilizing more neutral colors and designs for the fixed elements (flooring, tile, sinks) and injecting interest and texture with the less expensive more easily changed items (lighting, shower curtains, accessories) is the best way to balance your style and maximize your potential resale.
Before
After
The master bath update pictured illustrates the power of wallpaper removal, neutral paint selection, updated cabinet paint and hardware, and how lighting and mirror selection can transform a space. Other updates in that remodel included granite countertops, updated sinks and faucets.
Flooring
After
Before
In our kitchen remodel project below, we painted the existing golden oak cabinets and added new stone counter tops and back splash. One of the biggest elements that dated the original space was the 8”x8” glossy white tile. A 16”x16” porcelain tile laid in a brick pattern is a classic, durable and beautiful addition to this hard working part of the home.
Landscaping
Landscaping is another area of home improvement that provides a solid return on investment even though the actual numbers can vary by region and often fall within the range of 60 – 75%. Curb appeal is absolutely critical if you are anticipating selling your home. At a minimum invest in clean up, trimming shrubs and adding seasonal color.
If you are staying put, there are other considerations. Outdoor living areas are all the rage and they are certainly the least expensive way to add living area to your home. Keep useable space in mind when contemplating an outdoor living area. Waterfalls and ponds are beautiful yes; useful, no. Seating areas, fireplaces and outdoor kitchens fall into the useful category. Consider the flow and style of your home. Linking your interior and exterior spaces visually and with regard to style provides continuity – and enjoyment. Lastly, choose quality materials. Stone, locally adapted plants, interesting accents and durable, comfortable furniture provide both real return and a great deal of pleasure.
Final Thoughts
In spite of recent declines in the housing market and the challenging economy in general, our homes often remain our largest investment and the place where we relax, unwind and enjoy our friends and family. If you make remodeling decisions deliberately while balancing your enjoyment with the potential return on your investment, your home will provide returns every day in the enjoyment and comfort that your home provides. If you eventually sell, you will probably see another type of return ($$$!) as well.
About the Author
Lisa Baer
Lisa Baer brings broad real estate, design and business experience to Baer Home Design. Lisa is an Interior Design Society Member (IDS), Real Estate Staging Association Member (RESA), and an Accredited Home Staging Specialist (AHS). She is a Texas Real Estate Licensee Certified by the Graduate Realtors Institute (GRI) and an Accredited Buyers Representative (ABR). Lisa is a multi-state transferee and has designed and built multiple homes. Lisa’s business experience has honed her strong project management skills and her sensitivity to budget and time frame. For more information, please visit www.baerhomedesign.com or contact Lisa directly at 817.657.0185 or via email at [email protected] .