"To maximize profit, sellers must maximize the value their home offers."
Five things determine the attractiveness of a home to potential buyers: the home’s appearance, the physical condition of its structures or systems; the modernity of its features and appliances; how functional the home is; and its market value. The first four factors determine the fifth one.
In contrast to buyers, sellers only care about the value of their home; they want to make a lot of money when they sell the property. But to maximize profit, sellers must also maximize the value their home offers. For that to happen, they must do two things well.
They must maintain the home in a way that allows them to slow wear and tear on the home. But proper maintenance alone will not keep the home’s appearance and appliances up to date.
To retain their home’s appeal to buyers, sellers must do a second thing.
They must periodically update the home’s features to improve their appeal and functionality. The amount of care they put into selecting the home's features to improve and the expertise with which those features are updated is the number one thing that influences the value of a property.
"For landlords, renovating a rental home might be a wise investment."
For landlords, renovating a rental home might be a wise investment. Landlords can raise rental yields, attract better tenants, and add value to their buildings by making these smart updates.
Question: which updates offer homeowners the best returns on their investment?
Renovations that will add value to your house
Not all renovation homeowners do on their homes directly impacts the property's market value. Most updates are vanity projects that do not boost a home’s market value. Kitchen and bathroom upgrades, however, are the two top renovations buyers want to see in a home.
Why bathroom renovations will add value to your home
"A nicely renovated bathroom can increase a home’s value."
A home’s bathroom is closely linked to its market value because of the evolution in the role of bathrooms. Modern bathrooms have moved beyond their function as rooms where people go solely to take care of their sanitary needs and for personal grooming.
Today’s bathrooms are icons of luxury. They have expanded on their original function to a point where their roles now include rejuvenation, relaxation, and healing. Modern bathrooms focus on beauty and convenience in addition to their primary roles.
Buyers know this and expect sellers to update their home’s bathrooms to reflect this new reality. A nicely renovated bathroom can increase a home’s value. Actual ROI will depend on the extent of the renovation.
The best bathroom renovations:
Specific examples of profitable upgrades to do in the bathroom include:
Kitchen renovations will add value to your home
"Real estate agents often say that “kitchens sell homes"."
Modern kitchens have an expanded function that transcends their historical role in preparing meals. In a way, they are now the home's focal point due to their role as the family's social hub. Kitchens rival the living room as a place where we receive visitors.
Besides being where food is stored, modern kitchens are where meals are shared, and the family gathers to trade gossip. As visitors are most likely to see the second room in the home – after the living room – they serve as a showpiece for the property.
A homeowner’s style or social status is displayed in their kitchen. Buyers know this and expect sellers to invest the maximum effort to update their kitchens. Because of the central role of the kitchen in a home’s appeal, real estate agents often say that “kitchens sell homes.”
A well-renovated kitchen will improve the home’s value. The actual ROI depends on the scale of the project. More expensive overhauls do not necessarily guarantee higher returns. Instead, the best return comes from renovations that focus on the following:
Specific examples of profitable upgrades to do in the kitchen include:
Before embarking on expensive renovation projects talk to the experts
To conclude, while all bathroom and kitchen renovations may be expected to improve a home’s value, the best bathroom or kitchen features to upgrade depends on buyers' preferences in your area. That is why you want to talk to the experts before doing these all-important renovations.
Are you wasting money or adding value with your home renovation?
Castle Management is the premier property management company in the Greater Bay Area. We provide property management services that can help all property owners optimize their return on investment.
Want more expert advice to help you design, build and renovate your home?
Paul Netscher has written 2 easy to read books 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'. An Introduction to Building and Renovating Houses Volume 1 deals with Hiring Contractors, Managing Construction and Finishing Your Home. and Designing your ideal home Volume 2 deals with Finding Your Ideal Property and Designing Your Dream Home.
("Great for those that DIY. Very helpful in home renovations!" said a Reader on Amazon.com 5*****)
These books are available from Amazon and other online bookstores in paper and ebook.
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I’m a construction professional, author of several successful construction management books, and a home owner. I’ve made mistakes in construction management, I’ve seen others make mistakes, but importantly I’ve had multiple successful construction projects and I’ve learned from the mistakes. I want to share these lessons and my knowledge with you.
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and 'An Introduction to Building Houses - Volume 2 Finding Your Ideal Property and Designing Your Dream Home'
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