Should you remodel your home and stay for the long run or just update it because you're planning to sell within five years?
That's the question facing those who are planning to retire soon.
To make the decision, think about how long you plan to stay in your home, experts say. If it's less than five years, update your home and spend less. If it's longer, consider creating your dream home so you can enjoy it.
"If you are here for the long haul, you should turn the house into your house,” says Vince Butler, president of Butler Brothers Corp. in Clifton, Virginia. “If you sell, they're going to want to renovate again. Don't go so radical that it will take your house off the market.” Unless the market tanks in your area, the home is likely to appreciate over time.
That's what Karen and Thomas Hampton decided to do — improve their 1938 home — including the most recent project, remodeling their kitchen for the first time. They had to gut it and “have everything new,” she says.
If you're planning to stay, a major remodeling project can be worth it because you'll be able to enjoy living in your home and sell it later. “You're never going to get 100 percent of your investment back unless you stay long enough so that it appreciates,” says Vince Butler.
Remodeling Guidelines Whether You're
Staying or Selling Your Home
1. Figure how much you are willing to spend.
2. Decide which type of professional you need — an architect, a design/build firm, a certified kitchen and bath designer, a general contractor, big-box store, a specialty kitchen store, a high-end design firm, or DIY.
3. Get everything in writing so all parties understand the scope of the work and the cost.
4. Request a schedule including start and completion dates.
5. Put down 10 percent to 15 percent up front in a construction contract for the work to start, recommends Bill Millholland of Case Design/Remodeling. Some states regulate home improvement contracts.
6. For homes built before 1978, make sure lead-safe work practices are used for painting, sanding and other work that disturbs lead-based paint; even a small amount of lead dust can be harmful to children and adults, according to the Environmental Protection Agency.
What percentage of the value of your home should you spend on remodeling? “There is not a single good answer,” says David Pekel, CEO of the National Association of the Remodeling Industry, a nonprofit organization. He compares it to asking how much you should spend on a vehicle. “In different areas, municipalities limit the remodeling cost not to exceed 50 percent of the value of the house,” he says.
Otherwise, if you're in for the short run — less than five years — updating your home and improving its curb appeal is the way to go, experts say.
"The way your home looks from the street can impact the value,” says Bill Millholland, executive vice president of Case Design/Remodeling Inc. in Washington, D.C., Maryland and Virginia. “It's not one thing but the overall aesthetic,” he says.
For example, rather than remodel your kitchen or bathroom, update it, Pekel says. “You don't have to gut your kitchen to have a stunning result."
Instead, he says, you can color match your appliances, replace the floor, refinish the cabinets, install new countertops, update the backsplash, improve the lighting or any one or combination of these options.
Yet, in the Hanley Wood Media 2019 Cost vs. Value report, nine of the top 10 remodeling projects for recouping cost are exterior replacement projects, says Clayton DeKorne, editor of Remodeling magazine. The report evaluates how much a project is likely to increase resale value.
Top 10 projects for cost recouped, in the national 2019
Cost vs. Value report
Garage door replacement: 97.5 percent
Manufactured stone veneer: 94.9 percent
Minor kitchen remodel: 80.5 percent
Outdoor wood deck addition: 75.6 percent
Siding replacement: 75.6 percent
Steel entry door replacement: 74.9 percent
Vinyl window replacement: 73.4 percent
Grand entrance, fiberglass: 71.9 percent
Wood window replacement: 70.8 percent
Composite Deck Addition: 69.1 percent
"Use it as a guide,” Butler says. The report is just a starting point for thinking about the cost of remodeling your home, experts say. “A lot of this stuff is subjective,” Millholland says. How much any project will add to the resale value of your home “depends on the market and the value of the house,” he says. “If you're only going to be in it for five years or less, you're probably going to spend less money.”
In deciding whether to remodel or just update, it's not just about the money, experts say.
The Hamptons got a kitchen they love and the expectation that they've improved the resale value of their home for the long run.
"A big focus of it is quality of life,” Butler says.
by Harriet Edleson, AARP, August 16, 2019