To remodel or not?

Question

If I want to get the maximum value out of this house, should I spend the money to fix this or leave it??

The house is in pretty good shape. Fresh paint, cleaned thoroughly, and all that good stuff. It's a cute house in a good neighborhood. New siding, windows, and AC. But competition is fierce as there are houses for sale all around and on this very street.

Issue 1: The kitchen cabinets are old and ugly. They were black which made the fairly small kitchen look smaller so I painted them white to match the appliances and trim to see how it would look. The counter top is this old ugly dark grey multi-tone color. Cheap stuff. The appliances are all fairly new (fridge, ceramic cooktop stove, microwave/hood, no dishwasher) and we put down new tiled laminant (sp?).

Q: Should I spend the money to put new cabinets and/or counter top in?

Issue 2: The bathroom cabinets look good and the toilet is fairly new. But the bathtub, surround, and sliding glass shower door is horrible! The tub is old and metal with the white coating on it that is stained. I was able to clean it up some, but it's no longer glossy. All the caulking is discolored and must be replaced. The surround is also stained and is by design this ugly yellowish color. The sliding glass doors have this crusted stuff on it that I can't get off. The shower head is also kind of gross.

Q: Should I spend the money to buy a new tub and surround? Or should I keep what's here, re-caulk, and just do my best to clean everything?

I'm just not sure because I hear some things will not make enough difference in profit to justify the expense. What are your thoughts on this?

Josh Sanders · Answer

Jessica, I have found that when selling to retail buyers you have three groups. Those who have zero vision, and will expect a turnkey updated home. Those that know they can't afford a turnkey, have vision, and are willing to accept flaws for a deal. And finally those who are considering both. The last group can afford the turnkey, but have vision, and will consider and ugly deal, knowing they can quickly update the home to a condition as good or superior to your competition, but for less overall money. You have to determine what group(s) your targeting, and price your home accordingly. If it's the trun key crowd, your home must be nicier than the comps, and selling for the same or less to get noticed. If it's the other two, you can avoid the updating, but your price has to reflect it, and it should be advertised as the fixer oppertunity it is. My 2 cents. Josh

Jessica Hood · Answer

Thanks everyone! All very good advice. I know what to do now! I will let you all know how things turn out.

Will Barnard · Answer

Justin added some great advice. Check out your competition. If they have new cabintes and countertops in the kitchen, you will most likely need them too to get your sale. The kitchen is one of the best places to invest your money in as you almost always get a nice return on it where as other items you do not. Jim made some great money saving tips on your repairs as well. I think you have enough advice here to make a wise and informed decision on how to proceed.

Justin Pierce · Answer

There is no hard and fast rule. It's like Jon said, its purely based on profit. Don't just remodel a house for the sake of remodeling, unless you want a hobby. I love to add value to my projects. I'm always inclined to do the fix up, but I have to step back and look at the market, the comps. Go out this Sunday to every open house you see. What's in the competing homes? Do an as is value and time on market guess on your home. A realtor can be a big help in pulling data for recent sales, a very valuable tool. Then try to determine what the property will sell for after the fix up. (Don't dream, try to find a couple solid comps to base this number) If the house will be worth $100k as is and $120k after fix up but the repairs will cost you $15k then ask yourself; is $5k addition profit worth the extra work and risk of remodel. Yes, risk. You never know what you might find once you tear into a wall.

Jim Doine · Answer

Jessica, you've gotten several good suggestions, personally I would try something in between the way it is, and replacing it with new. You didn't say if the cabinets look nice since you painted them white. If they look ok and are serviceable I would install new cabinet hardware and replace the counter top (not granite but something modern and attractive. Assuming there is enough cabinet space I would have a dishwasher installed. ( today's retail buyer does not want to wash dishes by hand) I would have a professional refinish the old tub to make it shiny again. I would remove the glass enclosure and install a nice shower curtain, I would replace the tub surround. By doing it this way you will save a considerable amount of money over buying everything new and I don't feel it's necessary unless your property is in a high end neighborhood. :D Jim

Matt Stewart · Answer

Spend the money and fix it. You could replace that entire shower, tub, faucet for under $1k. The kitchen obviously be more expensive, but I can't imagine any way that you'll get maximum value for your property if you don't spend the money and make these repairs/upgrades.

J Scott · Answer

This is good opportunity to bring in a real estate agent who knows this area very well, and get his/her opinion. The agent should be able to give you an idea of what the competition looks like, as well as give you comps for various levels of rehab in this area. S/he would be able to give you an idea of whether you should market the property as-is, or whether you should put in some additional work. If you have access to MLS data, you can probably do this yourself as well.

Will Barnard · Answer

If you are retailing the house, then all the details matter and you will need to have the upgrades to get a sale, especially since you have a lot of competition. Perhaps now is not the best time to sell due to the circumstances you have laid out.

Jon Holdman · Answer

Hard to say without being able to compare your house to the competition. Its not purely a profit vs. cost situation. It may affect the type of buyer or even if you can get a buyer. If you're going for a retail sale, and I think you are, you need to be the best deal on the block to generate a sale. If there are five other houses that are the same but have new cabinets, baths, and countertops, then you will have to be priced significantly lower to find a buyer. Its that difference you have to compare to the cost of the changes. It may also take much longer to get a buyer, since most of the retail buyers will go for the nicer houses. Investors won't go for your house because you've priced it for a retail buyer. How does your house compare to the competition?