By: Kelly Smith, Marketing Director
You may wonder why we are writing a feature about remodeling when we are a new home builder. The fact is, most of us have to consider at one time or another to fix up the home we live in (either for ourselves or for resale) or buy an existing home that may not suit our tastes or lifestyle when we purchase it. Home buyers and owners need to be aware of all their options before choosing to buy or sell their home for something new. Knowing the costs of remodeling could save you money and headaches before you start wielding the sledgehammer.
Whether you like your home and just want to update it a little, you’re wanting to remodel to add value for resale, or you’re looking at existing homes and wondering how much more you’ll need to spend to update or fix it once you’ve moved in, it’s helpful to ask yourself a few key questions.
- What is the cost of the project compared to what value it will bring when I resell the home? According to Remodeling Magazine’s Cost vs. Value 2017 report for the mountain region (MT, WY, ID, CO, NV, UT, AZ, NM), there are a few common projects that retain most of their value when compared to cost.
Below are examples of projects that do not recoup much of their cost in our region.
2. If I spend more, will my home be worth more? Not necessarily. Be careful if you’re looking at major remodel projects like additions or entire kitchens. Small but noticeable updates can payoff in the mind of buyers without costing you too much out of pocket. For example, replacing the front door or garage door with something more current adds curb appeal as does adding stone veneer. All cost on average under $10,000 and recoup much of their cost. When considering a kitchen remodel, is it necessary to spend over $60,000 to increase the perception of value to potential buyers? It depends on the neighborhood and overall value of the home. In Billings, typical home values are in the mid-$250,000s so a kitchen remodel of that expense would likely not be wise on a home in that price range. Spending $10k-20k might be well worth your while in attracting buyers to your property online or during open house showings, however. Rather than replacing cabinets, try refinishing them. Add modern cabinet hardware for pizazz and replace scratched, worn out, dated laminate with new premium laminate countertops that mimic granite, marble, or stone for much less money than the actual thing. Or put the real thing on the island, the focal point of the kitchen, and a complementary laminate on the perimeter. New paint and a classic subway tile backsplash can add perceived value without breaking the bank.
3. Should I do it myself or hire a contractor? How much time free time do you have and how much of your time do you want to spend on the project(s)? Be realistic. Television DIY shows are NOT realistic representations of how much time, money, or sweat a project will take. Expect the unexpected and also delays. If you’re going to hire a contractor, do your homework. Pick three and contact their most recent references. Make sure they are licensed and insured. Never pay the full amount up front. They may require a deposit to cover materials initially, but be wary if they want to be paid in full before starting or completing the job. Good contractors are usually in high demand and you may have to wait to get on their schedule, but most likely, they’ll be worth the wait.
4. Do I have a clear plan? Preparation is the key to success with any remodel project. Home projects often involve more than one step and the order in which things are done is important for success. Do your research on the step-by-step process before attempting a new DIY project. Consult with an experienced friend or get online tutorials. Also, make a plan for how you will live in the house while the remodel is occurring. How disruptive to daily life will it be? Kitchen remodels tend to be the most inconvenient as homeowners find themselves washing dishes in the bathtub or cooking on camp stoves in the living room and eating off paper plates until the project is complete. Make sure to protect the rest of the house and household members from dust and debris by enclosing the work area in plastic.
5. Do I know my budget? Marjorie E. Gage of This Old House Magazine discusses budgeting when she talks about kitchen remodels. “Limit spending to no more than 15 percent of your home’s market value. Then, once you’ve come up with a budget number, lop 20 percent off the top and squirrel it away for unexpected necessities….” that may arise during construction. How will you finance the project? Dip into savings or get a home equity line of credit? Be sure about how much you have to spend before ordering that 8-burner Viking dual-fuel range.
Finally, if the cost of the remodel far outweighs the amount you will recoup in value or in lifestyle, consider other options. Adding a master suite or a bathroom to your current home may not be worthwhile if you’re willing to move to a new home that suits your needs today and in the future. Make sure to weigh in the headache factor as well. Remodeling isn’t for everyone. You must be flexible, patient, and willing to put in time and money. Be honest with yourself about the level of commitment you’re willing to make and if it will be worth it. Consult with experts in real estate to see what the market is placing value on right now. Hire a contractor if you’re inexperienced. And if you decide that remodeling just isn’t for you and you’d prefer a brand new home built with everything you want in mind, well……you know where to find us.
Remodeling Magazine. Cost vs. Value Report 2017, Mountain Region.
National Association of Realtors. 2015 Remodeling Cost vs. Value: Less is More. Stacey Moncrieff. January 2015.
This Old House. The (Don’t Get Burned) Kitchen Remodeling Guide. Marjorie E. Gage.