Thinking Renovation? Plan Ahead for Maximum ROI

Home appreciation is happening at an exciting pace, and housing inventory across Denver continues to be limited. Because of these factors, some homeowners are choosing to remodel and renovate their current homes in advance of moving, to further increase the value of their investment in the midst of this hot marketplace. Many homeowners choose to remodel believing their improvements will increase the resale value of their home. While this is often true, certain types of renovations have greater impact on home values than others.

Harvard’s Joint Center for Housing Studies expects remodeling spending to reach $340 billion in 2018, up 7.5% year-over-year. According to Remodeling magazine, homeowners choosing to perform high-end interior remodels will see less of a return on investment than those who perform exterior practical remodels.

On average, homeowners who undertake an interior remodelling project will see an average return on investment of 56% of the cost of the remodel; as an example, if you complete a $10,000 iterior project, you can reasonably expect to see a sales price increase of $5,600 based on that expenditure.

Exterior improvements are worth even more. Homeowners who upgrade their homes with new garage doors or windows will see an average payback of 75% of the cost of the remodel. Some of the most profitable exterior changes include garage door replacement, wood deck additions, and manufactured stone veneer installations.

Minor kitchen remodels like updating appliances can earn a whopping 81% return, while major high-end kitchen remodels will yield just 59%. Design tastes differ, but almost everyone will appreciate new appliances and fixtures that are energy efficient or improve functionality.

Before undertaking any remodeling projects, consult a real estate professional. I’m happy to help you think through which improvements to make for a short term sale, or for long term planning. If you’re going to invest in your home, there are better choices than others, and it pays to be informed.

Give me a buzz!

Jack Meyers 
Twitter: @jackestate


The Right Way to Work With Contractors

Contractors 2

If you own your home, you’ve probably considered various projects to bring it up-to-date or to upgrade your kitchen, a bathroom, your yard, flooring, etc. While this time of year is a slower season for contractors, in general, there are people who plan projects just before the holidays to wow upcoming house guests, or just to treat themselves to an extra special Christmas gift. This is also the time of year to begin planning projects for next Spring, as this is the busy season for most contractors and you’ll want your project to be on their schedule before they’re all booked up.

Whether you are a newbie to working with a contractor or have completed major renovations with the help of a contractor and/or team of professionals, there are ways to ensure the outcome is positive for both sides. Read on for tips on working with your contractor the right way.

GET RECOMMENDATIONS. Talk to friends and family, neighbors, the folks at the hardware store, building inspectors, the lumber yard, and of course the Realtor who helped you purchase your home.

WEED OUT ANY BAD SEEDS ON THE PHONE. Once you have a list of potential contractors, call each of them with the following questions:

  • Can you give me a list of previous clients?
  • Do you typically accept projects of this size?
  • How many other projects would you have going at the same time as mine?
  • How long have you worked with your subcontractors?
  • Are you available during my preferred timeline?

MEET YOUR TOP 3-4 PICKS IN PERSON. This is when your contractor will take measurements to offer an estimate, and this is your chance to ask questions and get to them a little better. Your rapport with a general contractor matters, and you should be comfortable asking any and all questions (including ‘do you have any concerns about my project’) understanding the timeline and process, and finding out if you are a good fit personally.

DO YOUR RESEARCH. Follow up with references the contractor provides you, check them out with the Better Business Bureau, and if possible — visit a current job site. These or other folks on the team will be in your home if you hire this team, and you’ll want to watch for behavior that seems courteous and careful of the workspace; this is, after all, someone’s home.

DON’T SETTLE FOR A LESS-THAN-IDEAL CANDIDATE BASED ON TIMING. If you come across an amazing contractor, chances are he or she will not be available on your timeline; contractors with stellar reputations and references probably keep a full calendar, and they aren’t waiting for the phone to ring. Once you’ve interviewed a few candidates, don’t settle for the one with the soonest available slot in an effort to hurry your project up. If your top pick has a two year waiting list, you may not be willing to wait that long, but if you settle for a contractor who is less than ideal but has the time, you may not be happy with the finished product.

REQUEST ITEMIZED BIDS FROM YOUR SHORT LIST. For a true cost comparison, ask each contractor you interview in person to provide an itemized bid. This will allow you to compare labor vs. materials. It’s a good idea, if you are considering a variety of materials or finished, to ask for a bid that includes these options. Concrete counter tops vs. marble, hardwood floors vs. luxury wood look vinyl, oak cabinets vs. cherry — a savvy contractor can give you a ballpark idea of how the project cost will vary based on material selection.

CONSIDER MORE THAN PRICE. Some of the best advice you can follow in terms of contractors — or any service provider: Throw out the lowball bid. If one bid is significantly lower than the others, there is reason for it, and probably not one that serves your interests in the long run. You don’t want a contractor who is flat broke, or may cut corners to get your job done. Either that or additional costs will pop up along the way and you’ll be unpleasantly surprised at the final cost of your project, compared to the initial bid. If a bid seems to good to be true — it probably is.

SET A PAYMENT SCHEDULE. A typical payment schedule is 10% up front, 25/25/25 during the project, and the remaining 15% when you consider every detail of the project to be in place as promised. A contractor who wants 50% up front, or whose payment schedule makes you uncomfortable in any way, is probably one to avoid.

GET EVERYTHING IN WRITING. Casual conversations do not make for great legal protection. If you discuss a change or addition to the project or the terms of your agreement with the contractor, get it in writing, with signatures and dates from each party involved. Don’t be afraid to ask for an addendum to the contract; a trustworthy contractor will follow through on his or her word, but if a misunderstanding or dispute should arise at any point, you don’t want to rely on either party’s recollection of a conversation — you’ll want clear terms in writing that all parties have agreed to. A solid professional will want this as well.

If you need a referral to a quality contractor (or a butcher, baker, candlestick maker, plumber, etc.), I’m happy to help! I’ve been helping Denver-area residents Buy, Sell and Invest for over 20 years, and I’d love to put my professional phonebook to work for you.

Drop me a line,

Jack Meyers
Twitter: @jackestate