Remodel wisely fo return on investment

Remodeling becomes a priority when preparing a home for sale or when updating colors and fixtures. Issues arise such as where to begin, to what extent improvements should be made and how much of the investment will be returned.

A study by Remodeling magazine and Realtor Magazine compares the cost of a project with an expected return for different regional markets. Minor kitchen remodels were of the highest return for all markets. In the Midwest, an average of 89 percent is recouped. Prospective buyers place the condition of a kitchen as one of the highest priorities when evaluating a home. The kitchen often becomes headquarters for family and friends gathering in one location.

When entering a home, it often is the first room guests gravitate toward and the same scenario occurs when buyers are looking at a home to purchase.

Updating a bath ranked second, with a return of 72 percent followed by a family room addition at 69 percent.

New categories are developing, such as vinyl siding and replacement windows, and these will become higher priority in markets where new construction continues to dominate sales. Installing vinyl siding would recoup 70 percent and replacement windows 61 percent.

The percentages of return provided by the study do not account for the overall marketing time. This factor plays a part in the net return for a seller and should be considered.

For example, a kitchen update may help the home sell in less time than competing homes that have not been updated.

With a quicker sale, the homeowner has saved time and money. A home that is for sale will have a competitive edge if it has a fresh look, making it appealing to more buyers.

When planning a project, the following guidelines may be helpful to maintain budget limits and maximize returns:

Keep improvements consistent with the square footage and general price range of the home. Buying the most expensive appliance with all the latest gadgets will increase marketability, not value.

Improvements that are not already installed do not need to be added, such as a trash compactor or hot water dispenser

Replace items that are no longer operating properly. Look for quality products, manufactured by veteran companies, average in price and neutral in color.

Utilize existing spaces. Moving walls and creating rooms can overimprove a property.

Select the proper material for the proper area.

(Peggy Davis is a Realtor with Murney Associates Realtors.)