Home Improvement Tips: Cost vs. Value

By Leanne Paynter | 1:49 PM on Mar. 5, 2006 | Florida Real Estate Blog

As a Florida Realtor, I'm occasionally asked which home improvements provide the greatest return on investment (ROI).  My answer really depends on several factors and in order for me to provide useful advice, I must be familiar with the property in question as the options can vary somewhat from house to house.  Having said that, there are a few rules of thumb that are rather standard no matter what the property.

Generally speaking, kitchen and bathroom improvements will provide sellers with the greatest resale value.  However, this does not mean it must be a complete makeover.  Sometimes replacing items such as flooring, countertops, sinks, faucets, cabinet hardware and/or lighting fixtures can make a room look considerably more updated than before.  Applying a fresh coat of neutral-colored paint is among the easiest and least expensive improvements you can make to any room.  On the outside of the property, well-maintained front yard landscaping can also provide a good return on investment. 

Another factor to consider when deciding what home improvements to make is the neighborhood the property is located in. Many real estate investment books advise home buyers and real estate investors to purchase the worst home in the best neighborhood in order to get the best value for their money.  Keeping this in mind, you don't want to over-improve your home or landscaping so that it becomes the best house in the neighborhood unless you are doing it for your own enjoyment and not for resale value.

The suggestions in this article can be useful even if you own a condo. If you are thinking of placing your Florida condo for sale, it helps to know what types of improvements or upgrades your neighbors have made before deciding what, if any, updating you will make to your own condo before selling.  The older the condo building is, the more useful this knowledge and research will be to you.

High on the list of things to take into account when making decisions about home improvements is whether you will be selling during a buyer's or seller's market.  In the hot seller's market that we experienced in recent years, I found that even properties that were not in good condition were selling quickly, sometimes at or near full price.  However, now that the market has cooled down somewhat and there are more properties on the market for buyers to choose from, buyers have the luxury of being pickier and expect more for their money.

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