ROI (choosing the right repairs and upgrades)
Written on Jan 29, 2009 by Jeff McCann
The Return on Investment (ROI) depends on the repair and, in some cases, which part of the country you live in. What may seem important and a necessity in one area of the country is deemed a deterent in other parts (ie. Swimming pool).
HomeGain recently performed a study that breaks down the ROI for the top four repairs. Cleaning and decluttering can create a 578 percent ROI (the highest return was 837 percent in the West). The ROI for staging a home was 340 percent (this category ranked second in the South and Mid-West). Landscaping the front and back yards, brought in a 415 percent ROI. According to the survey, each of these repairs range in cost from a few to several hundred dollars but can return thousands in profit.
Rounding out the study’s list of top repairs are: repairing plumbling and electrical, replace or clean carpeting, paint interior walls neutral earth tones, paint exterior walls (again neutral tones), repair damaged flooring, update kitchen and bathrooms. Ofcourse as always, the kitchen and the master bath should be where you focus on improvements if you can’t do them all. Perception is everything and a simple task such as cleaning all your windows inside and out before your open house is critical in a buyers perceived value on your home. Bottom line, show off the true highlights of the home and do everything you can to hide any flaws, especially those that are simply due to a lack of a little elbow grease.
When you invest in the repairs that run from $5,000 - $8,000, HomeGain, says that prices, for example, on a three bedroom, two bathroom home can result in price increases: in the West, as high as $22,762; in the East, as high as $23,532; in the South, $21,470; in the Mid-West, $20,279.
Sellers are always hesitant to invest in repairing, updating and cleaning their homes prior to listing the home for sale. Buyers don’t expect you to complete a full remodel of the entire home, but in a challenging market like today your goal is to make the property as move-in ready as possible. The longer a home sits on the market, the less appeal it will have and buyers will start to ask the age old question, “I wonder what’s wrong with this house?”.
