Question:
Does anyone have a list of the percent return you can expect from home improvements after the sale of the house? I thought I heard somewhere that you could recover 80+% on the money spent redoing a kitchen for example. What about a new roof, etc. Thanks, Jeff
Response:
well of course its going to depend on the house but i’d say 80% is way high for any improvement unless its something really prohibiting a sale
– Hide quoted text — Show quoted text -> Does anyone have a list of the percent return you can expect from home > improvements after the sale of the house? I thought I heard somewhere > that you could recover 80+% on the money spent redoing a kitchen for example. > What about a new roof, etc. > Thanks, > Jeff
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A new roof is considered maintenance, not an improvement. – Hide quoted text — Show quoted text – > What about a new roof, etc.
Response:
I think it very much depends on the market – take a major kitchen remodel for instance – we just spent $35K on one. One could not possibly expect to get that full amount back, because after all, a house needs a kitchen, not so? Assuming that the old kitchen was a wreck, as ours was, it was still a functional kitchen, so take the remodel cost and subtract what a basic kitchen would be worth for a specific size house in a specific area, and you will get a closer approximation of what you could recoup. In my experience the only remodel work that truly adds value to a house, is to add square footage. All this is meaningless, as it depends on the market, and whether a kitchen remodel adds enough of a wow factor that will make a buyer want to part with more money…. Lukas Louw – Hide quoted text — Show quoted text -> Does anyone have a list of the percent return you can expect from home > improvements after the sale of the house? I thought I heard somewhere > that you could recover 80+% on the money spent redoing a kitchen for example. > What about a new roof, etc. > Thanks, > Jeff
Response:
>A new roof is considered maintenance, not an improvement.
A potential buyer is going to look at a roof needing replacement as a liability. If the buyer thinks a new roof will cost $4000, then the buyer is probably going to offer $4000 less than they might have otherwise. But, the seller may have already discounted the asking price by $4000 to account for the roof needing replacement. So, if the seller replaces the roof, they don’t have to lower the asking price, and they won’t have buyers reducing the price they will pay to account for the bad roof. Brian Elfert
Response:
> Does anyone have a list of the percent return you can expect from home > improvements after the sale of the house? I thought I heard somewhere > that you could recover 80+% on the money spent redoing a kitchen for example. > What about a new roof, etc. > Thanks, > Jeff
Here’s a site that lists "Percent of Costs Recouped" from "1997-98 Cost vs. Value Report, Remodeling Magazine" http://www.namc.com/hottips/cash_improvements.asp?lrid=995 Among the items listed are "Minor Kitchen Remodel" at 102% and "Major Kitchen Remodel" at 90%. Though I can’t speak to the list’s validity.
Response:
- Hide quoted text — Show quoted text -> Does anyone have a list of the percent return you can expect from home > improvements after the sale of the house? I thought I heard somewhere > that you could recover 80+% on the money spent redoing a kitchen for example. > What about a new roof, etc. > Thanks, > Jeff > Here’s a site that lists "Percent of Costs Recouped" from "1997-98 Cost > vs. Value Report, Remodeling Magazine" > http://www.namc.com/hottips/cash_improvements.asp?lrid=995 > Among the items listed are "Minor Kitchen Remodel" at 102% and "Major > Kitchen Remodel" at 90%. Though I can’t speak to the list’s validity.
Oops. Here’s the link to a bit longer (though consistent with the previous) list: http://www.mortgagestuff.com/recouping.html
Response:
>But, the seller may have already discounted the asking price by $4000 to account for the roof >needing replacement. So, if the seller replaces the roof, they don’t have to lower the asking >price
There is no direct monetary advantage to that. Where is the profit in spending $4000 in order to get back $4000. Where is the loss in lowering the price by $4000 and saving the $4000 expense. It would be a valid point that perhaps some people would rather spend more on the purchase so as not to have to deal with getting the work done themselves afterwards, thus the home *might* sell easier. OTOH the alternate view is that the seller’s incentive is to get the job done as cheaply as possible (quality be damned) as they are planning on getting out, and the smart buyer will take the money off the price and then get a good job done to their satisfaction. whatever, -v.
Response:
– Hide quoted text — Show quoted text -> Does anyone have a list of the percent return you can expect from home > improvements after the sale of the house? I thought I heard somewhere > that you could recover 80+% on the money spent redoing a kitchen for example. > What about a new roof, etc. > Thanks, > Jeff > Here’s a site that lists "Percent of Costs Recouped" from "1997-98 Cost > vs. Value Report, Remodeling Magazine" > http://www.namc.com/hottips/cash_improvements.asp?lrid=995 > Among the items listed are "Minor Kitchen Remodel" at 102% and "Major > Kitchen Remodel" at 90%. Though I can’t speak to the list’s validity.
They’d like you to think that, but in the end the price you get is mostly determined by square footage and assessed value. People rarely get much more than a fraction of a remodel job back when they sell a house. -Tom
Response:
>There is no direct monetary advantage to that. Where is the profit in >spending $4000 in order to get back $4000. Where is the loss in >lowering the price by $4000 and saving the $4000 expense.
True. There is no direct monetary advantage. That doesn’t mean that there aren’t possible advantages, though. 1. The house might look nicer with a different roof on it. 2. Potential buyers might see the new roof and assume that the house has been well cared for, even if that is not necessarily true. 3. A period of time might pass between redoing the roof and selling the house. The seller has the benefit of having a new roof for that period of time. There are probably others if you think about it. It wasn’t clear to me that the original poster was thinking about improving his house merely to sell, but rather wanted to know which improvements are worthwhile and which are not. Dimitri
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> 2. Potential buyers might see the new roof and assume that the house has > been well cared for, even if that is not necessarily true.
Based on our experience, buyers do not spend that much time thinking about maintenance ‘quality’. The typical clown buyer forms an impression about the house early on and from that point on nothing short of a gold mine or a nuclear wastedump in the backyard changes his mind. In their mind, the ‘inspection’ will identify all evil, and they’ll take it from there. st
Response:
>Based on our experience, buyers do not spend that much time thinking about >maintenance ‘quality’. The typical clown buyer forms an impression about the >house early on and from that point on nothing short of a gold mine or a >nuclear wastedump in the backyard changes his mind. In their mind, the >’inspection’ will identify all evil, and they’ll take it from there.
Have you ever been a buyer? I’m sure you have. So have I. Did you spend time thinking about how well the house was maintained based on what was clearly visible? I did. Speak for yourself if you didn’t. Dimitri
Response:
this methodology is totally lame. What they do, is poll home remodelers and real estate agents on what they think returns the most value. That said there is something for kitchen remodeling, because women spend a lot of time there, and view it as important. Also, Fresh paint and new carpets returns an enormous amount, because people like the new carpet/new paint smell. but to a first order, all remodeling returns zero. Do it for yourself, or not at all.
– Hide quoted text — Show quoted text -> > Does anyone have a list of the percent return you can expect from home > > improvements after the sale of the house? I thought I heard somewhere > > that you could recover 80+% on the money spent redoing a kitchen for > example. > > What about a new roof, etc. > > Thanks, > > Jeff > Here’s a site that lists "Percent of Costs Recouped" from "1997-98 Cost > vs. Value Report, Remodeling Magazine" > http://www.namc.com/hottips/cash_improvements.asp?lrid=995 > Among the items listed are "Minor Kitchen Remodel" at 102% and "Major > Kitchen Remodel" at 90%. Though I can’t speak to the list’s validity. > They’d like you to think that, but in the end the price you get is mostly > determined by square footage and assessed value. People rarely get > much more than a fraction of a remodel job back when they sell a house. > -Tom
Response:
I remodeled the kitchen in my first house. It didn’t bring in any additional money in the sale, but it sell the house faster. I was "competing" with otherwise identical homes in the neighborhood. Potential buyers liked mine better, because of the newly remodeled kitchen (real oak cabinets vs. the builder’s original particle board cabinets, etc.). However, they weren’t about to spend more for my home. Matter of fact, being a starter home, potential buyers didn’t have a lot of any extra money to spend either. It was, instead, an attraction (or plus) which made my home their first choice ahead of the others. – Hide quoted text — Show quoted text – > That said there is something for kitchen remodeling, because > women spend a lot of time there, and view it as important.
Response:
I beg to differ. Sample size: 2. As an avid do-it-yourselfer, (and perhaps this is where the profits are made), I have remodeled/improved many rooms over the years; Since it only costs pennies on the dollar, DIY remodeling has a large return. (Last house: 50% profit). The key is to pick the correct house to remodel. Specifically, I look for a fairly late-model (no more than 10 years old) higher-end home that has not had the best of care. These houses often require a fair amount of remodeling and/or improvements, an thus sell for well below what a pristine model would sell for. Look for the higher-end homes where the builder chose size over features (i.e. lots of carpeting), as internal upgrades are much easier to add than square footage, and are high-profit items for builders. Then get to work: 1). Remove all carpeting, and replace with hardwood, tile or natural stone. Fractional cost to that of having a pro do it: 25%-30% 2). Put crown molding, shadow boxing, inlaid granite, hardwood staircases etc. Inexpensive (if you DIY), yet impressive. Data point: a 100% solid red oak 13-tread staircase (both treads & risers), oak railings and spindles is about $400 in materials. 3). If you MUST do the kitchen, the dominant cost is cabinets. 4). Attic: if if can be finished (i.e.headroom, windows etc), this is very inexpensive footage to add (though it is not worth as much as the main floors. 5). Basement: if if can be finished (i.e.headroom), this too is very inexpensive footage, though again not worth a great deal, per ft^2 I actually do the opposite of what you state; I do all the key upgrades to get the next owner to pay as much as possible… so I can move up in size, significantly, each time. The trick is to choose upgrades that people want. No one will pay a cent for a mahogany medallion inlaid in the wood floor, and this would take a fair amount of time to make. Does it work? hint: my current house, when finished, will be less than 10K ft^2, but not by much… My next one: who knows? 
– Hide quoted text — Show quoted text – > this methodology is totally lame. > What they do, is poll home remodelers and > real estate agents on what they think returns the most value. > That said there is something for kitchen remodeling, because > women spend a lot of time there, and view it as important. > Also, Fresh paint and new carpets returns an enormous amount, > because people like the new carpet/new paint smell. > but to a first order, all remodeling returns zero. > Do it for yourself, or not at all.
Response:
>Based on our experience, buyers do not spend that much time thinking about >maintenance ‘quality’. The typical clown buyer forms an impression about the >house early on and from that point on nothing short of a gold mine or a >nuclear wastedump in the backyard changes his mind. In their mind, the >’inspection’ will identify all evil, and they’ll take it from there. > Have you ever been a buyer? I’m sure you have. So have I. Did you spend > time thinking about how well the house was maintained based on what was > clearly visible? I did. Speak for yourself if you didn’t.
I’ve never been a buyer; I’ve built four houses, sold three. I’m also a former Civil Engineer so I do understand a bit or two about ‘visual condition’ vs. ‘reality’. Did the clowns who bought my house notice (or care) that there was not a single stain on 1100 sq ft of tile grout, courtesy of my wife who put sealer on it every couple years? Nope. Did their high power ‘inspector’ realize or know the difference between ‘loser with hydraulic cement and trowel’ concrete fix and high pressure epoxy injection (hint: one is invisible and lasts a couple years, the other looks like crap and lasts for ever ) (or the fact that *one* company here in Indianapolis knows how to do it properly)? or that there wasn’t a single crack in the paint (white laquer) on any window, trim, etc. because I had, over a period of seven years fixed each and every one of them? If it’s not in the inspection report, it never happened. Consumers are clueless sheep, unfortunately. It’s as simple as that… The fun part is that I have seen many instances where poorly maintained homes sell easier (because of deflated prices ). st
Response:
> Consumers are clueless sheep, unfortunately. It’s as simple as that…
ummm…. would that include you?
Response:
[snip!] >Did the clowns who bought my house notice (or care) that there was not a >single stain on 1100 sq ft of tile grout, courtesy of my wife who put sealer >on it every couple years? Nope. Did their high power ‘inspector’ realize or >know the difference between ‘loser with hydraulic cement and trowel’ >concrete fix and high pressure epoxy injection (hint: one is invisible and >lasts a couple years, the other looks like crap and lasts for ever ) (or >the fact that *one* company here in Indianapolis knows how to do it >properly)? or that there wasn’t a single crack in the paint (white laquer) >on any window, trim, etc. because I had, over a period of seven years fixed >each and every one of them? If it’s not in the inspection report, it never >happened.
How do you know what the buyers did and didn’t notice? Apparently they thought enough of the place to buy it from you. Right? >Consumers are clueless sheep, unfortunately. It’s as simple as that… The >fun part is that I have seen many instances where poorly maintained homes >sell easier (because of deflated prices ).
Sure, and that makes sense. If it is poorly maintained then it should sell for less. Do you want a quick sale or a sale for top dollar? Dimitri
Response:
> Consumers are clueless sheep, unfortunately. It’s as simple as that… > ummm…. would that include you?
In issues I am not educated about, sure. As a compatriot philosopher said… "Know Thyself". The key is not only to have a clue or two about selected areas, but also to recognize one’s lack of knowledge and seek appropriate supplements…. st
Response:
> How do you know what the buyers did and didn’t notice? Apparently they > thought enough of the place to buy it from you. Right?
’cause they were ‘picky’ enough to produce a laundry list of things to be fixed before ever having an inspection to start with, and also from what was on the inspection report itself . Needless to say, most anything in the list was largely irrelevant (‘oooh, the bathroom vent is soooo noisy’! (instead of: ‘oooh, this bathroom has *never* been used’ (there were three more))… Pity that the general population is not as educated in Decision Theory… They, much like Cons*mer Rep*rts, tend to focus on one or two negative issues without ever seeing the *big picture*. st
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