This time of year I see articles about improving your house in ways that will pay off when you sell. Experts of one sort or another extol the benefits of remodeling your kitchen and bathrooms as being the best for return-on-investment (ROI).
Indeed those rooms have a higher ROI than remodeling a bedroom or putting in a swimming pool. But they don’t actually return your investment. You won’t get back all the money you put into those projects, much less make a profit from them. All of that ROI talk veils the fact that you will lose money on those projects. If you remodel your kitchen and expect the typically quoted 80% back in ROI, remember that means you are actually losing 20% of what you paid. And that 80% figure so often touted was calculated during the real estate boom. Now that we are in a real estate downturn, you can’t count on getting back even 80% anymore.
My take on these improvements is to consider what you goals are. If you expect to live in your house for quite a few years, your enjoyment of any improvements could make it worth it to you. Not in the money you would get back when you sell, but in the amount of time you spend in the improved house. By the time you sell, those improvements could be out of style already anyway. If you want to improve your house for a sale, think of doing that within 12 months of the time you want to sell. That way your improvements are more likely to appeal to buyers.
We decided to make improvements that will probably be attractive to buyers as long as energy prices are high. Last summer we bought a new efficient furnace and air conditioner that have lowered our energy costs and given us a more comfortable place to live. We intend to show those bills to future buyers as a reason to buy our house.
This summer we are getting a new roof to replace the 33 year-old roof. It’s needed for function, but it will also add a fresh look to the house.
Down the road we are thinking about replacing the original windows with more energy efficient windows as another good selling point.
Our dishwasher bit the dust last year and we replaced it with an EnergyStar model in stainless steel for not too much money. Next on the list is a new stove because the old one is not functioning that well anymore. We will choose an EnergyStar range of course.
Obviously a lot of things are wearing out in and on our house; your house might be different. Our choices are also more affordable for us at this time since all our children are finished with college now.
No matter if we sell the house or continue to live in it for a long time, these improvements will “pay off.” Either they will help us sell the house or they will keep saving us money in our monthly energy bills. Win-win. And we don’t have to worry about most of these things going out of style!
Maggie says
Ashley, I know what you mean! Those shows are good for a laugh sometimes. It’s like they think they are getting a remodle for 20% of the cost. Unbelievable. Thanks for your comment!
Ashley @ Money Talks says
I watch those house buying shows all the time, like house hunters, and it makes me crazy the things people say. This one couple said they were going to replace all the perfectly good appliances with stainless “for the value”. Are you kidding me? You haven’t even bought the house yet! Hopefully they realized the resale value of the appliances doesn’t matter when you aren’t planning on selling.