The quick answer? It depends.
Renovating your home could make it a lot more comfortable to live in. If there’s a project you think will enhance your quality of life, like redoing your kitchen, updating your bathrooms, or finishing your basement to create a kids’ playroom, then it makes sense to move forward as long as you can afford to do so.
But if you’re selling your home in the near term, your motivation for doing updates may be to snag more offers and ultimately command a higher sale price. In that case, is renovating worth it?
Be careful with renovating before a sale
If your home has an obvious issue when you go to sell it, you may have a difficult time finding a buyer. In that case, it could make sense to sink some money into renovations before putting your property on the market.
Imagine you have a deck that clearly looks like it’s falling apart. That’s something that might send buyers running the other way. Even if you won’t get much or any use out of an updated deck, that’s the sort of renovation project worth doing before putting your home up for sale.
But unless something is glaringly wrong, it generally doesn’t pay to renovate your home right before selling it. The reason? The majority of home improvement projects you take on won’t give you a high enough return on investment to make them worth it.
Every year, Remodeling Magazine puts out a list of home improvements with the biggest returns on investment, and according to this year’s list, not one single project offers a return on investment of 100% or more. Garage door replacement, which Remodeling lists as the best project from a cost versus added value perspective, generally results in homeowners getting about 94% of their money back at resale. But if you’re not staying in your home to benefit from those new doors, then even that job may not make sense unless your current garage door doesn’t function.
Small improvements could go a long way
As a general rule, small home improvements, like repainting or replacing worn carpet, are worth making before listing a home. And again, any glaring issue with your home is something you should address prior to putting it up for sale.
But for the most part, you shouldn’t renovate your home solely for the purpose of trying to get a higher sale price out of …….