5 Home Renovation Projects With Good Return on Investment

 By: Jerry Kronenberg

 

Spring is a popular time for home-renovation projects, but a recent study by Remodeling magazine and the National Association of Realtors found that not all upgrades are created equal when it comes to reselling your place.

"I always recommend making very wise use of your remodeling dollars to get a good return on investment," says Judy Moore, a Boston real estate agent and a National Association of Realtors board member.

"If I walk into a house that has and old kitchen or an old bathroom that needs a ton of work, that might be a problem to sell 'as-is,'" she says.

Here's a look at the five best projects Remodeling found offer the best nationwide average returns on investment.
Putting in a steel front door
Projected return on investment: 85.6%

Moore says this inexpensive fix (estimated cost: $1,137) can improve your home's energy efficiency while making a good first impression on house hunters. "The doorway is very important because it's the first thing buyers go through to enter the home," she says. "If your home's front door is in bad shape and paint won't fix it, it makes sense to install a new one."

Installing fiber-cement siding
Projected return on investment: 79.3%
"Fiber-cement siding is a very popular product on new-construction homes because it's very low maintenance, it doesn't need painting for quite some time and it insulates a home well," Moore says. And while Remodeling predicts you'll spend $13,083 installing 1,250 square feet of prepainted fiber-cement siding and trim, Moore says the job will add to your home's curb appeal -- especially if you live in a cold-weather locale. "Siding is one of the first things to go in [cold climates] because of the weather," she says.

Adding a wooden deck
Projected return on investment: 77.3%
Moore says she's noticed house hunters favoring decks to entertain at home. "Decks are just a great way to enjoy your home," she says. Remodeling calculates that installing a 16-by-20-foot wooden deck with posts, railings and a built-in bench and planter will set you back $9,327.

Garage-door replacement
Projected return on investment: 75.7%
Moore says this upgrade can really boost curb appeal -- again, particularly in cold climates -- even though Remodeling estimates the job costs only $1,496. "Water and snow and things bouncing up from the driveway can easily rot garage doors," she says.

Minor kitchen remodel
Projected return on investment: 75.4%
Study authors defined this job as repainting trim and replacing the kitchen stove, oven, wallpaper, flooring and cabinet/drawer doors and handles (but not the cabinet/drawer interiors).
Remodeling estimates all of that costs $18,527, but Moore says the price is worth it if your kitchen needs work. "If the rest of the house is really nice but the kitchen is a disaster, you're going to get much less for house than you deserve," she says.

Why Your Perfect Home Needs Central Air

When you find your dream home, things just click. The closets may be a bit too small, the AC may come from window units instead of a central system and maybe there's no full-time guest room ... But the place just has that magic.

Still, it pays to think about those shortcomings, which could make it harder to sell when you're ready to move on in a few years. To some extent, the housing market is a fashion industry, and today's styles will sell better than yesteryear's.

A study by the National Association of Realtors says central air conditioning is the most critical of 33 features surveyed, with 65% of those polled rating it very important. So if the home doesn't have it when you buy, think about putting it in. You'll enjoy it and will find it easier to sell for the price you deserve.

Among other highly desirable features: new kitchen appliances and a walk-in closet in the master bedroom. Buyers also preferred homes that were less than five years old, which might surprise those who believe in old-time craftsmanship. The fact is, newer homes are better insulated, have safer wiring and are built to withstand winds that would blow older homes apart.

Not surprisingly, buyers would prefer choice sites such as those on the water. They want basements, and many look for a home with an in-law suite. (Of course, that doesn't mean the in-laws will move in. The suite can serve a grown child who's slow to launch, or function as a better-than-average guest quarters.)

Most buyers still want a traditional living room, even though modern life seems to gravitate to the great room.
Asked what they were willing to spend more to get, a majority of buyers said: a laundry room and den/study/office/library.

Many buyers who were satisfied with their home said they would still like more and bigger closets and a larger kitchen. In fact, 47% of recent buyers undertook a major kitchen improvement quickly, and almost as many upgraded a bathroom.

Of course, buyers' demands vary by region and demographics. In the south, as one would imagine, air conditioning is especially important. And older buyers are more likely to prefer single-story homes.
Obviously, there's no simple rule about what will appeal to a future buyer. But today's shopper would be wise to visit a wide range of homes, not just a few suggested by the real estate agent, to get a sense of the styles popular in the community.

Builders have a pretty good sense of what buyers in the area want, so tour some open houses in new developments. If new homes offer stainless steel kitchen appliances, dedicated laundry rooms, finished basements and bedroom-sized closets, you can bet that future buyers will demand those features -- at a minimum.

Keep in mind, though, that many major home improvements don't add as much value as they cost, so it's probably not a good strategy to buy a substandard home and plan to upgrade just before selling. Get a home that has the features other buyers value, or put them in quickly so you can enjoy them yourself before selling.

By: Jeff Brown

Market Ready - Decluttering your home

Q. What’s the best way to declutter  my home before I show it to potential buyers? Can I leave packed boxes in a corner or do I need to move things into storage.

A. Even if your house hasn’t been featured on “Hoarders,” making an effort to clear out clutter and to ensure that your home is as neat and tidy as possible before opening your door to buyers is common advice in real estate circles. And for good reason, said Jeffrey Stockwell, a senior vice president with Stribling & Associates in Manhattan. 

“It’s vital, because most real estate is aspirational, and buyers want to see themselves someplace better and more beautiful,” he said. “They want the feeling that if they move in there, it will be organized, clean and attractive. If they walk into a cluttered, messy space, there’s none of that feeling that life will be better.”

Even if your home is in good condition, Mr. Stockwell said, “if it’s cluttered, people will think it needs a renovation, and that lowers the value.” 

But cleaning up isn’t always easy. “You’re parting with things that have emotional value, and that’s very difficult for people,” he said. “They understand the need to do it. It doesn’t cost much, if anything, and yet it’s really hard to get clients to do it.” 

Packing personal belongings into boxes that remain in the apartment isn’t much of a solution. “If I go into an apartment and see a lot of boxes, even if they’re attractive boxes,” he said, “I immediately think there’s not enough storage space.” 

Jeffrey Phillip, a professional organizer in New York, agreed that the boxes need to go.

You could move those things into a storage unit, he said, but “better yet, take that time to get organized.”

Gearing up for a move is a “perfect time to really edit yourself down,” he said. There are a number of advantages to doing so: “You’re going to spend less money for someone to move you, and you’re also going to spend less money on storage.” 

Just “don’t expect to do it all in one weekend,” Mr. Phillip said. Give yourself a few weeks — or even months — to complete the task. 

“It’s all about doing small projects, one at a time,” he said, rather than trying to tackle the entire home in one shot, which could be overwhelming. 

Some areas where you can get quick results include wardrobes, kitchen pantries and drawers, and collections of CDs and DVDs. For the latter, even adding the discs to a binder and doing away with the cases can clear a substantial amount of shelving. 

As Mr. Stockwell put it: “The rule of thumb is, be ruthless.” If you’re unsure about something, he added, “Get rid of it.”

By TIM McKEOUGH

 

5 Ways Sellers Can Prepare for a Home Inspection

1. Don’t hide what isn’t working: If an appliance isn’t working, leave a note that indicates what isn’t working and how you’re getting it fixed. Don’t try to conceal defects because it can make the inspector start to view you as dishonest and wonder what else you’re hiding.

2. Make things accessible: Ensure the location of the attic and crawlspace are identified and easy to access. Don’t make a home inspector move your belongings in order to gain access.

3. Check the lightbulbs: If a lightbulb isn’t working, the inspector will need to determine if the fixture is inoperable. Save them time by making sure all the lightbulbs in the home operate, including those in the crawlspace, attic, and furnace rooms.

4. Note septic systems: If you have a septic system in the yard, be sure to leave a sketch that includes the location of it. It’ll avoid home inspectors, buyers, and real estate professionals having to conduct prolonged searches for it, Leopold says.

5. Keep appliances clear: Don’t leave dirty laundry in the washing machine or dryer because the inspector will need to test the appliances, and he doesn’t want to have to pull out dirty clothes in front of everybody, Leopold says. “Also, make sure your oven and stovetop are clear and clean, so we can easily test them without setting off the smoke alarm,” he adds.

Source: “Ask the Experts: What Should Home Sellers Do to Prepare for a Home Inspection?” RISMedia (April 16, 2013)

18 Ways to Prep Your Home’s Exterior for the Spring Market

Spring is in the air...This is the time of year when thoughts turn to spring cleaning; whether or not you’re selling your home. Of course, if you are listing anytime soon, you’ll want to be even more meticulous.
The busy spring market will be upon us before you know it, so here are some tips for getting the exterior of your home shipshape:


1. Remove glass from light fixtures and take out any little critters that may have found a home over the winter.  Be sure to use glass cleaner on the panes before replacing them in your fixtures.
2. Clean your mailbox.  If it hasn’t weathered well over the winter, it’s probably time to replace it.
3. Clean and polish, if necessary, your front door’s hardware. Replace it as well if necessary.
4. Check your house numbers.  Are they still in good shape and visible from the street?  If not, replace them.
5. Wash down your front door and garage door.  If you find that the previous summer’s sun has faded the paint, consider repainting.  (Your garage door should be painted a color that blends in with the brick or vinyl siding on your home.) Before painting, check with the paint manufacturer to see what the optimal outdoor temperature should be. You don’t want to paint when it’s still too cold outside.
6. Wash the windows.  If this isn’t your strong suit, hire a professional.
7. Hose down the porch and driveway to remove any excess salt left over from de-icing.
8. Sweep the porch, driveway and patio to get rid of any rogue leaves etc. left over from the fall.
9. Check your porch, driveway, and patio for any cracking or lifting of patio stones that may have taken place during a deep freeze.
10. Check your roof to make sure no shingles are missing or were damaged during the winter.
11. Remove debris from your gutters and drain spouts.
12. Rake the lawn.  However, before doing that it’s very important to check with your local garden center first to be sure it’s not too early.  If raked too soon before the ground thoroughly dries, you could potentially damage your lawn.
13. Remove winter displays from your urns.  For a burst of color, plant spring flowers as soon as weather permits.
14. Tidy up your gardens in preparation for planting season.
15. Organize the garage. Put away shovels, snow blowers, toboggans, and any other items that made their way into your garage over the winter.
16. If you don’t use your barbeque year round, it’s time to bring it out.  If it’s a built-in unit that will be staying with the house, be sure to clean the grills and wash down the lid.  If you have a cover for it, replace it if it’s worn.
17. Remove the cover from your swimming pool and clean your pool as soon as your pool service company advises that it’s OK to do so.
18. Bring out your patio furniture and set it up.  Although it may be too cold to sit outside just yet, you want potential buyers to see your outdoor living space’s potential.

These are some suggestions to get your started.  What else am I missing?  Feel free to add to the list!

                  

                     By Charlene Storozuk

Home Affordability Reaches Historic Low as Market Improves

In 2006, during the height of the seller’s market, home prices reached an all-time high. At the time, an interest rate of 6.4% was reasonable. Since then, both home values and interest rates have dropped significantly. The home affordability percentage is the percentage of median family income required for a median price home payment. This year, the United States broke another record with Home Affordability at it’s lowest ever. Today, the home affordability percentage is at 12.9%. The long term average is 21.6%.  Just a few short years ago, this percentage was 23.2% and in the early 1980’s this percentage was as high as 36.3%. 

In 1989, the average home sale price was $94,000.  Today, that average is $176,600.  Yet, the monthly principal and interest payment is nearly $200 a month less today than it was in 1989.  Meanwhile, inflation has caused the price of a new car to nearly double during that time period and the cost of gas has gone up from .97 cents to over $3.54.

Statistics show that the US housing market is slowly recovering. Last year, home sales increased by 9.2% and we have now returned to the 2007 level. In addition to increased home sales, seller inventory has seriously decreased down to 5.9 months of inventory. A balance market is when we have 6 months of inventory. History shows us that we never stay in a balance market long and that it takes approximately 6 months for a market to complete its turn to either a buyer or seller market. These facts cause us to ask the following questions; are we making the turn from the buyer’s market into a seller’s market? And when will we hit rock bottom home prices? These statistic’s seem to prove that we are making the change to a seller market. We will know the  answer to home prices hitting rock bottom when it’s too late.  Perhaps it already is. Interest rates are already on the rise. My recommendation is simple, if you can afford a home and you qualify for a mortgage, you better call me today because tomorrow may be too late.

Article written by: Daniel J. Smith

                                      Statistics provided by NAR

Study: Buyers Can Afford Bigger House If It's New

The National Association of Home Builders says its new study shows that home buyers can buy a more expensive, newer house and still have the same operating costs as owning an older existing home. 

NAHB examined data from the Census Bureau and Department of Housing and Urban Development’s 2011 American Housing Survey to determine how utility, maintenance, property tax, and insurance costs vary depending on the age of a home. 

Houses built prior to 1960 have average maintenance costs of $564 per year. On the other hand, homes built after 2008 have average maintenance costs less than half that — $241, according to the study. 

 

For homes built prior to 1960, operating costs average nearly 5 percent of the home’s value while the average was less than 3 percent for homes built after 2008, the NAHB study found. 

The study also took into account the first year after-tax cost of owning a home by its age, examining the purchase price, mortgage payments, annual operating costs, and income tax savings. “A buyer can afford to pay 23 percent more for a new house than for one built prior to 1960 and still maintain the same amount of first-year annual costs,” according to NAHB.

New houses tend to cost more than existing homes, so the mortgage payments will likely be higher — but the lower operating costs of a newer home will give buyers annual costs that could be about equal if they purchase a lower priced, older home with a smaller mortgage payment but higher operating costs, NAHB says. 

"Home buyers need to look beyond the initial sales price when considering whether to buy new construction or an existing home," says NAHB Chairman Rick Judson. "They will find that with the higher costs of operating an older home, they can often afford to spend more to buy a new home and still have annual operating costs that fit their budget."

Source: National Association of Home Builders