When you are thinking about selling your house, one of the first questions that will come to mind is: "what should I do to increase the value of my home?", which quickly becomes: "if I remodel, how much will I recoup"??
The Cost vs Value report is published every year and a lot of good information can be accessed from this article by Sal Alfano of the
Remodeling Magazine of Jan. 2013.
Typically the data is sorted by project (kitchen remodeling, bathroom, etc..) and by region within the US. (there are 4 regions). Overall, the first thing that jumps out in the most recent report is that the ratio that one recoups has gone up, because of the recovery of the real estate market.
Results of the report are also summarized on NAR’s consumer website
HouseLogic.com, which provides information on dozens of remodeling projects, from kitchens and baths to siding replacements, including the recouped value of the project based on a national average.
In my experience however, the return of a lot of these remodeling projects is much higher in our area, the Silicon Valley, than one can read in the Cost vs Value report. I cannot put an exact value on it of course, since each property is going to be different, but it is my experience that most buyers in the Bay Area are willing to pay a major premium for a property that has been remodeled and is ready to move in.
Imagine a property worth $600k, that is in need of a new bathroom. If you'd spend around $10k to remodel a bathroom (hypothetically), that would buy you a fairly nice remodeled bathroom. The sales price is most probably going to be more than $610k in that example.
I believe that in this area, the Silicon Valley, if you know a contractor that will do a good job, for a reasonable price, and you have the time to stay involved in the project to monitor it, you would be better off with the remodel. I also believe this is why there are so many purchases here which are investor-driven, and why there are so many multiple offers on "fixer-uppers".
Do you have any experience on this matter? Let me know!
As always, thanks for reading!,
Francis Rolland
Silicon Valley real estate
Local market:
Smart graphs
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