Real estate agent Deanna Petruzelli has provided a list of considerations for those mulling over the idea of renovating their homes with a view to selling them, in what many experts agree is a seller's market with home inventories at record low levels.
“Home inventory is currently very low, so it is definitely a seller’s market,” said Petruzelli, an associate broker at Century 21 Diversified Realty, servicing Carmel, Noblesville, Cicero, Fishers, Zionsville, Geist, Westfield and various Indianapolis areas. “For that reason, many homeowners are considering costly renovation projects to up the resale value of their home.”
Although many home improvement projects are worthwhile, Petruzelli stresses the importance of knowing which ones are worth it from an investment standpoint, and lists the following three considerations to keep in mind:
No. 1: Value-added (or subtracted) for future buyers. “Think of your renovation project in terms of what will appeal most to potential buyers, even if you are not considering selling anytime soon,” said Petruzelli. “Converting a garage into a living space or eliminating a bedroom or a closet may cause future buyers to cross your home off the list; these spaces are among the most important to potential homeowners.” Many buyers, adds Petruzelli, won’t even look at homes that lack the right number of bedrooms.
No. 2: Project payoff. Petruzelli suggests sellers be cautious when undertaking large-scale renovation projects. Although smaller DIY touch-ups and proper home staging can yield big dividends for sellers, certain large projects may not always pay off. However, large projects that pack the most punch when it comes to adding value include two-story additions, master suite upgrades and major kitchen remodels.
No. 3: Your neighborhood’s market condition. “Consider the resale market in your neighborhood before deciding on a renovation project,” said Petruzelli. “This is particularly important if you’re considering large-scale projects, like a full kitchen renovation or converting an attic space into an extra bedroom. Every neighborhood has a price threshold of what buyers are willing to pay, so a $75,000 kitchen remodel may not be worth it in a neighborhood where home values top out at $200,000.”