Would it be helpful to have a few tips about return on investment for house repair/remodel projects related to future sales of your home? If you said yes, are not alone. It’s such a hot topic (and has been for many years). I’m going to link one article because it’s one of the few that actually mention that there are other factors regarding a sale price (not list price) for your home, besides what you’ve remodeled or enhanced. It’s from the HGTV website. I caution everyone about trying to attach specific percentage values to upgrades. Yes, basic upgrades like a roof and furnace or upgraded electrical will almost always give you a percentage return on those upgrades. But they are not a guarantee of a certain price! I’m only going to focus on a few things in this post. Two things I know to be true, without assigning a percentage value to a home repair/improvement.
If your home is a resale with wood floors, I feel comfortable saying that shiny, clean wood floors are involved in the majority of home sales within the City of Cleveland. Younger buyers are not crazy about wall to wall carpeting and if they are looking at a 1920s Arts and Crafts style home, well they probably want wood floors. Of those 56 homes sold in my last post? 90% of them had floors like the ones in the above photo. They are refinished, clean and shiny. Yes, it may have cost $2500 (what I was told) to refinish the living room, foyer and dining room at the home in the photo but buyers might move on to another home to purchase, one that already has shiny wood floors, if you don’t do it.
An example of a house that sold for more than normal market value in 2017. This house sits on W. 122nd street. Maybe you’ve walked these blocks south of Lorain. To me, these blocks are fantastic. Pretty, well kept homes, yards, flowers. Still, we’ve just come out of a recession, right? During that time, there weren’t a lot of homes sold. The above house is special because it’s ‘energy efficient.’ So much so that it has certification paperwork to prove it. Newer windows, HVAC, insulation, you name it. This makes the house much, much less expensive to operate per month. Lower heating and cooling bills. They DID open up one wall, 1/2 way. So you still did not lose the separation to the dining room but you can talk to people in there.
What’s unusual? Two other homes that sold on this street in 2017, one was a 3br 1 1/2 bath home for $33,500 and one was a 4 bedroom one bath home for $45,000. This house once went into foreclosure, the Land Bank (discussed in an earlier post on here!) took it over, a housing non-profit took it over and here it is. Also, remember how many bedrooms in the other two homes sold? This home has 2 bedrooms and one bath. The first two sales on W 122nd had about the same square footage, in the 1200 sq ft range. This home? 1,089. And yet it was listed at $99,000 and sold for $97,000. Cash deal? I don’t know but not necessarily because this house, via tax auditor’s info, is ‘tax’ valued to sell between $86,000 and $108,000.
Why the heck am I telling you all this? Because getting an energy efficient home is one thing you can do to garner more money When you sell it. Get it upgraded with an energy efficiency certification.
By the way, there is a true market for 2 bedroom one bath homes. (More reasonable than a 500 sq ft rolling tiny home, right?). But this one’s true value is total upgrading and upgrading to a terrific energy savings level. Which by the way also gave this house a tax abatement (yes, you can get this for your home too) which still has 5 yrs ish to go on it. Currently paying around $400/yr on taxes. Plus the savings on utility bills. So on a street where a normal, pretty or upgraded home might go for 65 to 79k, this house with really good amenities to offer to garner a sale price almost 20k more.
You will spend money to do the energy efficiency update, no question! But if you bought the house a long time ago and don’t have a mortgage on it, or if you bought it more recently at a below market rate price, I swear this is the way to go. And depending where your home is located, a lack of those first two things may not hinder you from making money on your sale.
I suggest everyone: check out an energy efficiency certified upgrade before you do any renovations on your home. It doesn’t cost you anything and gives you something to consider. Both for your own value (less taxes, utility bills) or a future buyer for your home.
Let me know if you have questions or would like me to preview your home to discuss the above suggestions further.