Experts say if you're thinking of remodeling, pick rooms like the bathroom or kitchen where you'll get the biggest return on investment when it comes time to sell.
One of the first things any homeowner should do before hiring a contractor is to think about how long he or she plans to stay in the home. If you're getting ready to sell, it's probably best to avoid a big-budget remodeling project. Better to focus on smaller things that prep your house for a good sale like a fresh coat of paint.
However, if you plan to stay in your home for a few years, a major investment will likely pay off financially. Still, before you start any large-scale renovation, look at the market in your area and get a good feel for your home's value. Find out what comparable homes are selling for in your area because the last thing you want to do is price your home out of the neighborhood.
Once you've got the statistics, there are a few more things to keep in mind before you start writing any big checks:
A recent Angie's List nationwide poll found 61 percent of members plan to update their homes in 2008. Most people said they were looking to invest, on average, more than $11,000 for mostly kitchen and bath makeovers. Good thing, since real estate experts say kitchen and bath investments offer the best return when selling a home. Other popular remodeling projects:
- Landscaping and yard work
- Painting inside or out
- Doors and widows
- Decks and porches
- Because there are many variables that affect the housing market, don't expect a dollar-for-dollar return on a project. A $20,000 kitchen remodel doesn't necessarily mean you'll get $20,000 more for your home.
- Converting existing space into usable space, like an attic into a bedroom or finishing a basement, will offer a better return on investment than adding square footage. Plus the upfront costs aren't nearly as high.
- The amount of return is directly proportional to the grade of materials. When finishing a basement, for instance, wall-to-wall carpeting and drywall will bring a lot more than cheap paneling and a drop-in ceiling.
- Kitchens and baths are a good area to focus on if you're going to be in your house for at least five more years. These are the more costly remodeling projects, but they're also more likely to recoup the investment.
- Behind-the-scenes improvements that increase the house's integrity, such as a new roof, won't garner the kind of return you might expect. Buyers expect these things to be in good shape on a home.
- A common remodeling mistake is adding a pool. Most people reject this because of maintenance requirements and safety issues for children. Exception: If your home is the only one on the block that doesn't have one, it could be a factor when it comes time to sell.
- Don't sink big dollars into extra landscaping. If you're planning to sell soon, keep it simple. Add some mulch and brightly colored flowers, but don't drop several hundred dollars on brick pavers. Let your buyer do that.
Angie Hicks is the founder of Angie's List. Visit for ratings on contractors and other consumer tips.