If you’re out there looking for your dream home, you might want to enlist your imagination and look beyond what’s right in front of you. With a little foresight, you’ll be able to envision what a house could become with a little bit of TLC.
Confronted with higher prices and limited entry-level inventory in many areas, this is a tactic many homebuyers are taking. In fact, according to recent research, nearly 60 percent of spring home shoppers are considering homes that need renovation. Realtor.com®’s spring homebuyer survey reveals that just over half of homebuyers considering a home that needs some fixing up are willing to spend more than $20,000 on renovation, with 95 percent of them optimistic that they’ll see a return on this investment.
What’s driving buyers’ confidence in home renovation? A world of home-improvement media. Among spring home shoppers considering a home in need of renovation, nearly 60 percent said home renovation television has made them more optimistic regarding home renovations. “Replete with inspiration at their fingertips—like Pinterest, Instagram and various home renovation TV shows—some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget,” explains realtor.com® Chief Economist Danielle Hale.
According to the survey, homebuyers aged 35 to 54 were most likely to consider a home that needs renovating, at 65 percent. This group is more likely to include current homeowners who are more experienced with what it takes to maintain and improve a home, as well as those who are more seasoned about choosing a home that fits within their budget. Just 59 percent of younger home shoppers aged 18 to 34, who are less likely to be current owners, are considering a home in need of renovation, and understandably, less than a third of buyers older than 55 would consider a home that needs renovations.
What are home shoppers most likely to upgrade? The kitchen comes in as the No. 1 renovation, chosen by nearly 30 percent of respondents considering homes that need to be renovated. This was followed by a bathroom renovation at just over a quarter (26 percent) and new wood flooring at 20 percent.
If you’re considering a renovation, keep the following in mind:
- Determine the overall expense associated with any and all renovations that need to be made before making an offer on the house. It’s also important to consult professionals, rather than guessing on your own. Then, increase that amount by at least 10 percent for unexpected costs that always arise.
- Check with city hall to find out how zoning laws may play a part in the renovations you’re considering, and the costs of any permits involved.
- Make sure your renovations are in line with the neighborhood. Don’t invest in a remodel that would bring the home’s value above what the neighborhood would tolerate—otherwise, you might not see the return on your investment.
- Let a home inspector have the final word to ensure the extent of the necessary renovations aren’t more serious…and costly.