Home Improvements
If you are considering making home improvements, one of the primary considerations will be the potential return on investment. Here are some of the most common home renovations and their ROI:
Home Improvements vs. Home Maintenance
If your roof is 20 years old, it’s time to replace it rather than remodel your bathroom to make it more aesthetically-pleasing. Many home buyers are finding it difficult to come up with a down payment and monthly mortgage payment, let alone the funds to maintain the property they just bought. Most home buyers don’t want the headache of extra costs following the actual purchase. First-time home buyers in particular are inclined to look for properties that require little to no home maintenance and are “move-in ready.”
Green home improvements can greatly impact a home’s energy efficiency, which has the added benefit of compounding savings over time. According to the 2015 Remodeling Impact Report (RII), a joint study from the National Association of the Remodeling Industry and the National Association of Realtors, here are some high ROI projects:
- Insulation upgrade: approximately 95 percent ROI
- Replacing old windows: approximately 80 percent ROI for new vinyl windows; approximately 58 percent ROI for new wood windows
- HVAC Replacement: approximately 71 percent ROI
- New roofing: approximately 105 percent ROI
Kitchen Renovations
An updated kitchen is a key selling point with home buyers; after all, it’s the heart of the home! According to the RII survey, 79 percent of remodelers say that kitchen upgrades are the sec
ond most popular renovation project in 2016. Kitchen colors are changing, and although white is still a popular choice,everything from cabinets to backsplashes will be done in less saturated tones, according to interior designer Jane Lockhart. “Charcoal, grays, and even neutral pastels like pale blue, pale green gray, and tinted whites are the new alternative to the standard white,” she says. Consumers are also interested in new ways to maximize kitchen storage, with cabinetry featuring deeper or multi-tiered drawers. Granite and quartz continue to be the most desired countertop materials, with neutral gray or brown color palettes. With a full kitchen renovation, you can expect up to a 67 percent ROI.
Bathroom Renovations
The major trend in updating bathrooms is removing the garden tub and replacing it with a large shower “room,” allowing the occupant to enjoy a spa-like experience. The room is typically completely tiled and often features a bench and storage nooks for soaps and towels. Add some square-shaped fixtures and shower heads to remain on-trend. Shower seats and grab bars, once delegated to senior citizens, are going mainstream. Bathroom colors are trending toward cool tones that create a tranquil environment. Blues and greens can be paired with white and touches of wood for a fresh, serene vibe. According to the RII survey, bathroom models will yield an attractive ROI of 58 percent.
Hardwood Flooring Upgrades
The top request of home buyers across the nation? Hardwood floors, according to HGTV. In fact, the National Association of REALTORS® found that 54% of home buyers were willing to pay more for a home with hardwood flooring. Home buyers want hardwood flooring because it easily unites many rooms and is the easiest to clean. Installing hardwood can be expensive–between $9 and $12 per square foot, compared with about $3 to $5 per square foot for carpet—so you may opt to install hardwood only in some rooms rather than throughout your home.You can expect an ROI of up to 100 percent by installing or refurbishing hardwood flooring in your main living areas, or even throughout your home!
An Open Floor Plan
Up to 40 percent of home buyers prefer an open floor plan that seamlessly blends the kitchen, dining area, and family room. Tearing down walls to create open spaces is a big trend in home improvement right now. If you live in a single-story home, where none of the interior walls are load-bearing, removing them is relatively simple. In a multi-story house, however, you must ensure the wall you want to remove is not load-bearing. You will most likely need to consult with a structural engineer to advise you on the feasibility of taking down a wall, and what additional work you would need to do to shore up the house if you want to remove a load-bearing wall.The specific percentage of value recovered from the cost of opening up a floor plan is difficult to estimate due to the large range of construction issues that affect final costs.
If you would like more information about major or minor home improvements and their expected ROI, contact us today at 919-813-6449 or send us an email to [email protected]. Visit us online at realestateexperts.net.
Home Improvements
If you are considering making home improvements, one of the primary considerations will be the potential return on investment. Here are some of the most common home renovations and their ROI:
Home Improvements vs. Home Maintenance
If your roof is 20 years old, it’s time to replace it rather than remodel your bathroom to make it more aesthetically-pleasing. Many home buyers are finding it difficult to come up with a down payment and monthly mortgage payment, let alone the funds to maintain the property they just bought. Most home buyers don’t want the headache of extra costs following the actual purchase. First-time home buyers in particular are inclined to look for properties that require little to no home maintenance and are “move-in ready.”
Green home improvements can greatly impact a home’s energy efficiency, which has the added benefit of compounding savings over time. According to the 2015 Remodeling Impact Report (RII), a joint study from the National Association of the Remodeling Industry and the National Association of Realtors, here are some high ROI projects:
- Insulation upgrade: approximately 95 percent ROI
- Replacing old windows: approximately 80 percent ROI for new vinyl windows; approximately 58 percent ROI for new wood windows
- HVAC Replacement: approximately 71 percent ROI
- New roofing: approximately 105 percent ROI
Kitchen Renovations
An updated kitchen is a key selling point with home buyers; after all, it’s the heart of the home! According to the RII survey, 79 percent of remodelers say that kitchen upgrades are the second most popular renovation project in 2016. Kitchen colors are changing, and although white is still a popular choice,everything from cabinets to backsplashes will be done in less saturated tones, according to interior designer Jane Lockhart. “Charcoal, grays, and even neutral pastels like pale blue, pale green gray, and tinted whites are the new alternative to the standard white,” she says. Consumers are also interested in new ways to maximize kitchen storage, with cabinetry featuring deeper or multi-tiered drawers. Granite and quartz continue to be the most desired countertop materials, with neutral gray or brown color palettes. With a full kitchen renovation, you can expect up to a 67 percent ROI.
Bathroom Renovations
The major trend in updating bathrooms is removing the garden tub and replacing it with a large shower “room,” allowing the occupant to enjoy a spa-like experience. The room is typically completely tiled and often features a bench and storage nooks for soaps and towels. Add some square-shaped fixtures and shower heads to remain on-trend. Shower seats and grab bars, once delegated to senior citizens, are going mainstream. Bathroom colors are trending toward cool tones that create a tranquil environment. Blues and greens can be paired with white and touches of wood for a fresh, serene vibe. According to the RII survey, bathroom models will yield an attractive ROI of 58 percent.
Hardwood Flooring Upgrades
The top request of home buyers across the nation? Hardwood floors, according to HGTV. In fact, the National Association of REALTORS® found that 54% of home buyers were willing to pay more for a home with hardwood flooring. Home buyers want hardwood flooring because it easily unites many rooms and is the easiest to clean. Installing hardwood can be expensive–between $9 and $12 per square foot, compared with about $3 to $5 per square foot for carpet—so you may opt to install hardwood only in some rooms rather than throughout your home.You can expect an ROI of up to 100 percent by installing or refurbishing hardwood flooring in your main living areas, or even throughout your home!
An Open Floor Plan
Up to 40 percent of home buyers prefer an open floor plan that seamlessly blends the kitchen, dining area, and family room. Tearing down walls to create open spaces is a big trend in home improvement right now. If you live in a single-story home, where none of the interior walls are load-bearing, removing them is relatively simple. In a multi-story house, however, you must ensure the wall you want to remove is not load-bearing. You will most likely need to consult with a structural engineer to advise you on the feasibility of taking down a wall, and what additional work you would need to do to shore up the house if you want to remove a load-bearing wall.The specific percentage of value recovered from the cost of opening up a floor plan is difficult to estimate due to the large range of construction issues that affect final costs.
If you would like more information about major or minor home improvements and their expected ROI, contact us today at 919-813-6449 or send us an email to [email protected]. Visit us online at realestateexperts.net.
Image courtesy of housingwire.com.
If there is one area in real estate that confuses potential home buyers, it’s the preconceived notion that you are required to make a 20% home loan down payment. Consumers, particularly millennials and first-time home buyers, are tentative about taking the plunge toward home ownership due to this belief, according a recent survey (Profile of Home Buyers and Sellers) by the National Association of REALTORS (NARS).
This perception runs contrary to data collected by NARS over the past 35 years. The data indicates that the average median down payment for first-time buyers is five percent on average.
“It’s possible some of the hesitation about buying among young adults is from them not realizing there are mortgage financing options available that do not require a 20 percent home loan down payment.
Consumers are wary about their ability to save the funds they believe they will need for a down payment, with house prices and rent continuing to rise each month. According to the NARS survey, 19 percent of current homeowners stated that they have received financial assistance toward a down payment from a parent or relative. Of these, most were age 34 or younger, living in the Northeast, or living in an urban area.
Still, the NARS survey found that the appetite for home ownership remains strong, with 78 percent of homeowners and 60 percent of renters saying now is a good time to buy.
Loan Officer Teresa Parker of Cunningham & Company Mortgage Bankers agrees. Parker is a preferred lender with NC Housing and has extensive experience working with the organization’s affordable housing products for her clients. “Many clients are not aware that for eligible borrowers, a down payment could be as little as 3 percent,” she said. “In addition, there are both loan and down payment assistance programs I can help my clients obtain that, combined, can provide home financing at close to 100 percent.” These down payment assistance programs are not necessarily limited to first-time home buyers. Move-up buyers may also take advantage of these programs, if eligible.
Parker also points out that eligible first-time home buyers can obtain the Mortgage Tax Credit (MCC) along with their loan closing, which enables eligible first-time buyers and military veterans to save up to $2,000 a year on their federal taxes. In addition, consumers who buy homes in certain targeted census tracts may be eligible for the MCC program, even if they are not first-time home buyers. The MCC leaves homebuyers with more money to put toward their mortgage payment. “If you qualify, you can claim a federal tax credit for 30% of the interest you pay on an existing home (50% on new construction)—up to $2,000 per year for every year you live in your home,” says Parker.
Am I Eligible To Make Less Than a 20% Home Loan Downpayment?
You may be eligible for a Mortgage Credit Certificate if:
- You are a first-time home buyer or military veteran
- You meet the income and sales price limits
- You are purchasing a new or existing home in North Carolina
- You occupy the home as your principal residence within 60 days of closing
- You are a legal resident of the United States
What Properties are Eligible?
- New and previously owned single-family homes
- Townhouses
- Condominiums
- New or used manufactured homes
For more information about down payment options, contact Teresa Parker, Loan Officer at Cunningham & Company Mortgage Bankers, NMLS # 2024 at (919) 697-2598 or [email protected].
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