It’s almost officially summer — time for sun, beaches and a new marble kitchen?
Summer is a very popular time for property owners to make upgrades. Many New York City buildings insist renovations take place only during warm weather months, because that’s when many residents are away. But while the timing may be right, not every improvement automatically increases a home’s value.
Real estate appraiser Jonathan Miller, president and CEO of Miller Samuel, is in-the-know about which make the most (dollars) and sense. He explained to the New York Times that some projects don’t always generate a full return on investment and that sometimes a renovation can actually decrease a home’s value.
It comes down to a matter of taste. Miller presented a wacky example of a Greenwich Village homeowner who had a $30,000 entertainment system built-in made of purple Formica for his home. (Spoiler: the owner was not Prince.)
“The owner thinks the value is the apartment plus $30,000,” Miller told the Times. “The buyer is thinking it’s the value of the apartment minus $3,000 to remove it and repair the wall. Here lies the problem.”
Along with Miller, other experts weighed in on the best and worst types of renovations to create future value.
Some Do’s include:
- Not-so-glamorous roof repairs
- Equally boring garage door and window replacements and adding insulation to save energy
- Mid-range bathroom and kitchen renovations
While high-end kitchen and bathroom upgrades tend to make owners happy, they do not always equal big bucks upon resale. Mid-range renovations in these areas make better investments, experts said.
Stan Humphries, chief economist for Zillow Group, explained mid-range bathroom renovations are prudent because, “The return is $1.71 for every $1 spent.”
Some Don’ts include:
- Refinishing basements
- Personalized gym spaces or rooms that cannot be easily modified for other purposes.
- Anything very specific that would be objectionable to potential buyers.
Still, sales experts note that in this competitive sales market, high-end upgrades may be necessary to attract people to the listing pictures online.
“In a market where there is an oversupply … There’s more of a premium for a home that has already been done,” explained Miller.