Smart home upgrades in a down market

For years, the conventional wisdom on remodeling was that you'd never go wrong putting in a new kitchen or bathroom. While home prices were skyrocketing throughout recent years, many sellers found that they could make back 100 percent or more on those renovations.

Those days of such pleasant certainty are in the rear-view mirror now, and in their place, defaults, dissatisfaction and record lows flood the market.

But remodeling is still a worthwhile endeavor for a homeowner - you just need to know where to put your money.

1. Add a wood deck
While kitchen and bathroom improvements still hold their value nicely upon resale, homeowners seeking an even better return on their investment might do well to look out their windows to the possibilities outside.
Nationally, the home-improvement project reported to return the highest percentage of its cost was a wood deck addition (85.4 percent), according to the most recent Remodeling Magazine "Cost vs. Value Report," published in December by Hanley Wood, LLC, Washington D.C., in cooperation with the National Association of Realtors.

Increasingly, remodeling projects that boost a home's curb appeal are among those that best recoup their cost when it comes time to sell. "In any market, but especially in a competitive market that favors buyers, you want to make a good first impression," says Stephanie Singer, a spokeswoman for the National Association of Realtors. "How a home presents on the outside might influence a buyers' perception of what's going on inside." In other words, you want to motivate potential purchasers to step out of the car instead of driving past to another listed house.

2. Freshen up the bathroom
Give the bathroom a facelift in less time than you think, says Nicole Sassaman, a Los Angeles-based designer and developer who has designed and sold more than 70 condominiums. Porcelain coating sprayed over old tile revives a dull bathroom. At the very least, switch out cheap fixtures and hang a fresh shower curtain and towels.
Of course, when undertaking remodeling projects of any scope, your first consideration should be your own comfort and happiness.

"Part of the return on investment is the enjoyment you get out of using it," says JP Frenza of Brooklyn, N.Y., who has lived in, rehabbed and resold two homes in recent years. "I think there's also an honesty in the renovations that buyers pick up on immediately. Otherwise, it looks a little stiff."

3. Repair, paint the walls
There's nothing worse than a bad paint or drywall job, says Sassaman. "It sets people off for the whole house. People who go to look at a house appreciate a fresh paint job. It feels cleaner." Choose neutrals for the walls and save color for your furnishings.

4. Update the siding
What do many buyers appreciate? Outside the home, they want materials that not only look good, but also are low-maintenance, says Sal Alfano, editorial director for Remodeling Magazine.

The "Cost vs. Value Report" revealed that siding replacement was the project that returned the second highest percentage of its cost, at 83. 2 percent.

Installing fiber cement siding is considered an upscale renovation project, but it's well worth your time and money.

Considering it needs to be painted only every 15 years or so, it's one home improvement that makes sense now and later.

5. Replace the hardware
Handles and hinges on cabinetry should match. Period.

"If I cheap out on the hardware, it affects the selling price," Sassaman says. This is a small detail often overlooked by homeowners, but the continuity such minor hardware pieces makes quite an impact.

6. Make minor kitchen renovations
Since few people spend an entire lifetime in the same home, it's wise to avoid too much customization. Kitchens, in particular, are where homeowners can fall victim to trends and themes that might limit future interest from buyers and additional profits from resale. "When we talk to people about that, we encourage them not to be too edgy in their selection of materials," says Alfano.

"If your countertop is purple and the walls are green and your fixtures are a strange finish, it's going to be hard to appeal to a wide range of buyers." The Cost vs. Value Report ranked minor kitchen remodeling third in terms of offering homeowners a return of its cost, at 83 percent.

7. Buy a new house number
If the numbers on the outside of your home are crooked or unreadable, it will make buyers wonder whether the rest of the house is as poorly maintained.

Sassaman suggests splurging for the better-quality numbers. "What does that cost? Twenty dollars, as opposed to the cheapies? That first impression can make all the difference."

8. Replace the windows
New windows are a smart addition to a home, particularly if the home's current energy efficiency is undergoing changes too. The "Cost vs. Value Report" reported that wood window replacement was project that returned the fourth highest percentage of its cost, at 81.2 percent, and vinyl window replacement returned the fifth highest, at 79.3 percent.

Alfano says window technology between today and just 20 years ago is "like night and day. You're not going to get your money back in a year, but you're going to get it back."

9. Change the flooring
Dirty tile or vinyl flooring is a turn-off. Hardwood floors are a great alternative, especially if you can afford the real thing. "It makes a house look newer, lighter and brighter," Sassaman says.

10. Create storage
People love their "stuff" - so add storage wherever possible. Frenza found that when selling his last Brooklyn apartment, buyers appreciated the built-in storage he installed, since space was at a premium.

"Every single person who went through the space said, 'I can see my stuff in there,'" he recalls. "Can I say it returned the investment 100 percent? I don't know, but I know we did really well."

Keeping up with the Joneses
If you're concerned about resale value down the line, it's critical to understand how your home compares to others in your neighborhood, regardless of what renovations you're contemplating. If your house has only two bathrooms when all the others on your block have three, it might make more sense to add a washroom than to replace the siding.

"You need to bring it up to the standard of the neighborhood and the expectation of the buyer," says Sal Alfano, editorial director for Remodeling Magazine, which recently published its "Cost vs. Value Report" in cooperation with the National Association of Realtors.

That also works in reverse. For instance, if you install granite countertops and Viking appliances in your kitchen, yet other homes in your area don't have similarly high-end upgrades, you might not recoup as big a percentage of the cost.

One way to find out how your home measures up is to attend open houses in your neighborhood. If you want specific feedback on projects you're considering, you can consult a realtor regardless of whether you're ready to sell, since agents often are interested in building long-term relationships, says Stephanie Singer, a spokeswoman for NAR. "They see a lot of homes and not just out of context, but with buyers," she says. "They're constantly getting feedback about what buyers like or don't like."

(c) CTW Features