Last year I wrote about what projects brought the best return on investment according to the annual Cost vs Value Report. This year the report is out again but showed a couple of differences.
Top 5 Best ROI Projects in Boston
1- Minor Kitchen Remodel 88.5% ROI
2- Deck Addition (wood) 86% ROI
3- Enty Door Replacement (steel) 80.9% ROI
4- [tie] Attic Bedroom Remodel and Siding Replacement (vinyl) 78.1% ROI
5- Window Replacement (wood) 77.5% ROI
Top 5 ROI Projects National Average
1- Entry Door Replacement (steel) 85.6% ROI
2- Deck Addition (wood) 77.3% ROI
3- Garage Door Replacement 75.7% ROI
4-Minor Kitchen Remodel 75.4% ROI
5- Window Replacement (wood) 73.3% ROI
Top 5 ROI Projects in Boston
1-Siding Replacement (fiber-cement) 86.4% ROI
2- Garage Door Replacement 77.8% ROI
3-Siding Replacement (foam-backed vinyl) 77.6% ROI
4-Window Replacement (vinyl) 76.4% ROI
5- Window Replacement (wood) 74.7% ROI
Top 5 ROI Projects National Average
1-Siding Replacement (fiber-cement) 79.3% ROI
2- Garage Door Replacement 75.2% ROI
3-Siding Replacement (foam-backed vinyl) 71.8% ROI
4-Window Replacement (vinyl) 71.2% ROI
5- Window Replacement (wood) 68.4% ROI
As you can see, the more you spend does not mean the more you get back. Before beginning any home improvement project it is important to consider the purpose for the project. Yielding a high return on investment is good to consider, but if you have no intention to sell anytime soon, there is no reason not to make a house your home. Once you have decided to pursue a project make sure to use the right contractor, no matter the project, the right contractor will save money in the long run.
Many people buying a home for the first time believe they will know what home to buy because they will fall in love. This is somewhat true, but as the saying goes “you can’t judge a book by it’s cover.” In competitive real estate markets, love will take some work and the question you have to ask yourself is how much love (and work) are you comfortable putting in?
Every homebuyer needs to be flexible in certain areas of their criteria. In an ideal world, a buyer finds the perfect home in the area they want and the house is move-in ready (or a turn-key property in realtor speak).
If location is the most important factor in your search and nothing is available in your price range, you might want expand your price range. I’m not only advocating looking at higher priced properties, but also those at a lower price point, which will require some level of renovation. If you find listings matching all of your other criteria but are rough around the edges, take a look and keep an open mind to the possibilities. In competitive real estate markets, the properties with more than the average days on market tend to be fixer-uppers. One of the biggest positives of buying a fixer-upper, is your home can reflect your tastes instead of the seller’s. Another positive is you have a better opportunity to negotiate since many buyers do not want to put in the time, money, or effort for renovations. Less competition from other buyers means more leverage when it comes time to negotiate. Once you have purchased the property and made improvements, you will see a much quicker appreciation in your asset’s value. The improvements do not have to be top-of -the-line renovations to see a quick appreciation, many simpler projects can bring a strong return on your investment.
Keep in mind renovations are not for everyone. Unless you plan to do a renovation yourself, you can never guarantee how long the work will actually take. Projects can be delayed for all kinds of reasons but the worst case scenario comes from the fact not everything can found during inspection and what can start as a simple project can turn into something major. A dream home can turn into a money pit, but a looked over fixer-upper, can be the home you never knew you always wanted.
Buying a home is an emotional process. Like in dating, don’t be discouraged by thinking all the good ones are taken. Sometimes taking a second look on an option that doesn’t seem perfect might become better than what you thought you wanted.
Once you put your home on the market, you have to come to terms with the fact that this will no longer be your home. Once you’ve accepted this, you can start to see it how a buyer would see it. The first step is to get all the clutter out and depersonalize. If you were buying a home, you would want to see a property free of all the previous owners’ personal items. People don’t want to be reminded that they are going through someone else’s home. You want to inspire the buyer with an unassuming canvas, something a buyer can look at and say, “This works, but I can see how I can do a little more.”
Hiring a professional stager is one of the best investments you can make when selling a home. If you are living in the house while it is on the market, a stager can help you by advising how to make the space appeal to a buyer while keeping it functional and livable for you. And if you have moved out and taken your furniture with you, staging a home can give life and warmth to an empty space. Unfortunately buyers do not always have the vision necessary to see themselves in a house. Staging allows them to see a house as their home.
You know your home. You know the time of day where the sun hits a room just right. Highlight the features that makes your home unique. Make sure to capture what makes this home so special and how it can make someone else just as happy to call it home.
Fix or upgrade the features that will turn someone off. Are the fixtures in the bathroom out of date? Change them to something more current. Are the cabinets in the kitchen still white with a wood border? Simply switch them out. Doing those little changes will add value to your home. If a buyer comes in and only sees what they will have to change and the work they will have to do, it can either turn them off completely or cause them of give a lower offer.
Many buyers these days like to come into a property and see little or no work needs to be done. Features like a landscaped garden can seem like a great highlight, until a buyer starts thinking of all the work and money they are going to have to spend to maintain it. Realizing these ahead of time, you can turn what some see as a negative into a positive. Offer helpful tips to show it’s not that difficult to take care of a garden or leave the name of gardeners that can help maintain it.
After viewing the unique property at 928 East Broadway in South Boston recently, I started thinking about the line separating historical preservation and new development. The client who was interested in the property is an investor whose intent was to tear down the existing structures and build a new condo development on the land. It is not as though the developer could not appreciate the charm and significance of the Second Empire mansion built in 1867, but the land would be worth more to him with a new building than with the existing structure. He’s not alone as most of those who have shown interest in the property have had similar plans.
As a single-family home of over 6066 square feet the mansion with a mansard roof offers a significant amount of space for any neighborhood in Boston’s downtown neighborhoods. The current price of 2.3 million dollars looks good considering any other property in Boston’s central neighborhoods with over 6000 square feet is asking for over 4 million dollars. But once you factor in an adjustment for location (the competing properties are all in Back Bay or Beacon Hill) and the need for a total renovation the perceived savings disappear. Consider a middle of the road 250 dollar per square foot renovation and you are looking at a 1.5 million dollar restoration project.
The cost concerns are one reason most potential buyers have been looking at the property for development, but the other reason is the half acre of land located on East Broadway a block from the beach and Pleasure Bay. Only one property on the market in Boston’s central neighborhoods offers as much land and it is a parcel in New Market Square zoned for commercial use.
“Given the investment potential of a half acre corner lot a block from the Atlantic Ocean, why has it not sold?”
Part of the answer has to do with two parcels existing on one deed, each with encumbrances on each other, but the biggest potential hurdle may be resistance to leveling an historic residence. The property is not listed on the National Registrar of Historic Places or any other list of protected property, but it is an historic property.
928 East Broadway was built in 1867 for James Collins, a wholesale liquor distributor and a real estate investor who developed much of the City Point area of South Boston during the late 1860’s to late 1880‘s. The remaining large scale frame mansard residences in Boston include the Manning/Johnson House at 69 Thomas Park and 928 East Broadway. The home features an unusually deep set-back, in part because Colins owned the entire block now bordered by East Broadway to the South, Farragut Road to the East, East 3rd Street to the North, and P Street to the East. Before Day Boulevard was constructed, the plot of land owned by Collins was oceanfront property.
The Queen Anne brick row houses Collins built for his children
In 1884, Collins hired architect Patrick W Ford to build the Queen Anne brick row houses located adjacent to his residence at. Collins built these homes for his children and in 1890 he built the more utilitarian row houses at 823-833 East Third Street for his employees.
The recent history of 928 East Broadway is more humble as it served as a boarding house as recently as 2006.
I assume, as have most of the potential investors, proposals to tear down the existing building will be met with objections from abutters and the neighborhood association.
I can see the argument for historical preservation and love Boston for its sense of history, especially when it comes to its wide-ranging examples of different architectural styles. The problem is when those with no financial stake have the ability to restrict progress and affect the finances of a landowner. It is a fine line, one that must be dealt with on a case-by-case basis, and in better ways than I have seen recently.
Personally, I would love to see the mansion at 928 East Broadway restored to the elegant single-family home it once was. But without the checkbook to see it through, does what I want matter?
Please let me know your thoughts in the comments below. I would like to know what you think about 928 East Broadway and regarding restoration vs development in general.
When starting to do any renovations or improvements on a property the most important factor to consider is who or what the work is for. If this a property that can be called home for generations, then go personal, build it to fit your style, something that you want and will want for years. If the work is needed but in a property that you will out grow within several years, consider a practical approach. The more personal style shown in a project, most likely the less of a return on investment (or “ROI”) you will get at resale.
The cost vs value report 2011-2012 surveyed 35 remodeling projects over 80 cities that range from mid-range to upscale projects. According to this survey, replacement projects had the better return versus remodeling projects and mid-range projects recouped their costs more than upscale.
The top 5 projects that showed the best return at resale. Remember this is the national average and results may vary depending on location.
Fiber-cement siding. This immediately improves curb appeal and 78% of the cost is recouped for a mid-range replacement.
Entry door replacement. Again improves curb appeal and 72.8% of the cost is recouped for a mid-range replacement.
Attic bedroom. This is a bigger project that adds an extra bedroom and bathroom and stays within the home’s original footprint. 72.5% of the cost is recouped. On average this project can cost $50,000 and has a value of $36,000 at resale.
Minor kitchen remodel. This is a project that doesn’t have to cost very much if you think of it as a facelift. Replacing cabinets, hardware, countertops, and old appliances with energy efficient models can recoup 72.1% of the cost.
Garage door replacement. 72.1% of the cost is recouped but this is a project that can vary in price depending on the home and the materials that have to be used. For a detached garage, an uninsulated door is fine. But if the garage is part of the house or rooms exist above the garage, spending more for an insulated door is necessary. Either way this project again immediately improves curb appeal.
The projects with the least return on investment are additions such as a sunroom or master suite. Remodeling a home office or bathrooms are also least likely to see a return on the dollars you put into the project, the reason being more people would want an extra bedroom rather than a home office and bathroom projects rank so low due to the expense. Taking a smaller bathroom and turning it into a spa also takes square footage away from other areas of the home and changes the original footprint of the home.
Resale is just one factor to consider when doing home improvement projects. If this is a home you have no intention of selling, making it what you want is more important, within reason. If your home is on top of your neighbors, you may want to tone down how much personality you show on the exterior of your home because it may make it stand out (and not in a good way).
Visit the Cost vs Value Report to see the full data and learn more about cost vs value. On the site, you can compare the data nationally, regionally, and by city.