“Return on intvestment” is an often used term in today’s financial circles.
Simply put, return on investment, or ROI, refers to how much profit you stand to make from an investment. In this case, it’s your home.
This is a burning question in today’s balanced real estate market.
As little as three years ago, if you performed an HGTV-quality renovation on your home prior to putting it on the market, you were almost guaranteed to make a handsome profit in an inventory-starved market.
That has left vendors in an awkward position today.
The question now is: Just how much should vendors put into their home to make it stand out in such a competitive market without losing a chance on good return for the money they spend on upgrades?
“It differs with each property,” said REALTOR® Eric Neumann. “That said, if you’re thinking of selling your home, the first thing you should do is call a REALTOR®. Make an appointment to have them come over to your home to go through it.
“Once they have a look, they’ll be able to tell you what needs to be done, and what doesn’t,” added Neumann.
Fellow REALTOR® Frank Zappia concurred.
“It only makes sense to consult a REALTOR®,” he said. “Selling homes is what we do day-in, day-out, so we’ll be able to pinpoint what needs to be done pretty quickly.”
He added that it’s a process that could take weeks or months before a home is ready to go on the market.
“I may go to a home two or three times to work with vendors on doing the things required to get their home ready,” said Zappia. “I first do an assessment, and give the vendors a list of things that need to be done. I then give them some time to do those things, and will check back in maybe a week or two.
“If they’re not done, I’ll work with them to make sure those changes are made. A home has to be ready to go in every area before we put photos up on MLS® and do showings.”
Neumann said it all comes down to which upgrades will give vendors the best return on their investment.
“The biggest thing is if you can do it yourself — simple things like painting, replacing dated light switch plates, light fixtures and cupboard handles, taps, maybe putting in a new vanity in the bathroom — do it. If there are any holes or blemishes on the walls, patch and paint them.
“The important thing is to call a REALTOR® before you do anything, if you’re thinking of doing anything or need sound advice. We know what people will be looking for,” added Neumann.
In that sense, vendors may be better off doing simple upgrades as opposed to major ones, said Zappia.
“It’s been my experience that buyers will pick out little things,” he explained. “Doing some simple updates and maintenance isn’t as obvious, whereas if you have the home remodelled, things like poor paint or finishes could stand out. A home doesn’t have to be remodelled to stand out, it just has to be well-maintained.”
That’s the key, according to Neumann.
“Buyers need to know that you’ve taken care of your home, so I tell my clients to do things like clean the windows, clean out the eavestroughs, and have the downspouts extended. Little things like that tell people that you take pride in your home.”
Now that it’s springtime, there’s another simple task that should be added to the to-do list, he added.
“Landscaping is a very important item. I just listed a home and spent over five hours cleaning up both the front and back yards to make them look tidy and presentable. If people come to view your home and your yard looks horrible, that poor impression will stick with them.”
Zappia said the key to maximizing the ROI on the upgrades you perform on you home is to keep them as simple as possible.
“If your carpet is old, maybe lift it and have your hardwoods refinished. It’s fairly inexpensive to do, and makes your floors look one hundred times better. Or, if you don’t have the budget, just clean, wash, paint and de-clutter.
“With today’s balanced market, there are more opportunities for buyers to look elsewhere if your home doesn’t look well-cared for,” added Zappia.
“Take a day or two to do those simple things, and that sweat equity is likely to pay off.”