Almost every day, sellers ask me, “Should I sell my home the way it is, or should I remodel it first and then sell it?”
A survey from the National Association of Realtors looked at the costs to upgrade a property versus the recapture on the sales price. The survey showed that almost all of the improvements done recapture 75% or less of the money spent on them. A major kitchen remodel recaptures only 59% of the costs—that’s a lot of money lost!
So why do people remodel their kitchens? My hope is that they’re doing it for their own enjoyment, not for resale. Will a kitchen remodel increase the value of your property? Yes. But will it increase the value by the cost of doing the remodel? No.
There is an exception: If you’re a contractor who buys kitchen cabinets at a discount and you do the work yourself, you can build equity. But the average Joe will likely hire someone else to do their remodel, so they’re not personally making money on the remodel. In most cases, it’s better to sell the home the way it is rather than sink a lot of money into a property to remodel it and then sell it for more money.
Here’s another remodel tip: Do you want a home with a pool? That’s fine, just know that pools are expensive—even a cheap pool can cost $30,000 or more to install, and that’s not to mention all the extra amenities that people tend to purchase to go with the pool (spas, grottoes, etc.). From a financial perspective, you’d better enjoy that pool once you pay for its installation because you’re not going to recoup that cost once you go to sell your home.
Some people choose to buy a home with a pool already installed because they don’t want to spend tens of thousands of dollars to install it, only to get a small portion of that back upon resale. In general, this is the cheaper option, but don’t get hung up on this singular feature when it comes to buying a home. Pools are accessories that can always be added later.
If you have any questions, comments, or concerns about today’s topic, or if you’re looking to buy or sell real estate in general, don’t hesitate to reach out to me. I’d love to give you some advice!