Home Updates. Are they actually worth it?
So, you want to put your home on the market, but you don't know if you should update it before doing so?
According to a study by Cinch Home Services, three in 4 homeowners say they'd rather replace their appliances than accept a low offer on their home. This same study came to the conclusion that a majority of homeowners think upgrading their appliances will increase the value of their home by almost $14,000.
This ideology results in almost 60% of homeowners replacing their air conditioner, almost 46% will choose to replace their dishwasher and about 40% will take a look into replacing their water heater.
The Cold Hard Truth
Upgrading appliances will not necessarily guarantee an allowance for a huge return on your investment. While these steps taken may make your home more desirable, you may not even make back all money spent.
Major kitchen remodels according to 2021 research recouped only about 57% of the initial cost. While a simple garage replacement can recoup nearly 94% of the initial cost.
Here are some examples of updates that will lend you the highest return on investment:
- Average cost: $10,386
- Average resale value: $9,571
- Cost recouped: 92.1%
Minor Kitchen Remodel
- Average cost: $26,214
- Average resale value: $18,927
- Cost recouped: 72.2%
- Average cost: $19,626
- Average resale value: $13,618
- Cost recouped: 69.4%
When a Home Improvement is Beneficial
Certain home improvements may be considered "capital Improvements." For example, replacing your flooring and upgrading your kitchen appliances would fall under "capital improvements." While you may not see an increase in the value of your home with every improvement, "capitol improvements" can be written off.
Refinancing your home after making improvements will most likely lend a higher appraisal than when you purchased it. In doing, this means you can potentially increase your equity which will lower your loan-to-value ratio.
While renovations may make you feel better about putting your home on the market; we are currently living in a seller's market, which means you really may not need to put in the effort! With that said upgrading your home wouldn't hurt.