Is Renovating Before Selling Worth It? Will you recoup your costs during the sale of your home? These are common questions that come up prior to selling a home that may be outdated.
Making a decision on this comes down to several factors, such as market conditions, your home’s current condition, and your budget. There are certain upgrades that can increase your home’s value, but also keep in mind that there are also some that may not provide a return on investment. If you decide to renovate your home, taking a more neutral approach in choosing your designs and renovations can help appeal to a wider range of prospective buyers. Some renovations that you believe may add value due to your taste or preference may actually deter a buyer.
With limited inventory and limited land to build new homes, Hawaii’s real estate market can be very competitive, and buyers often prioritize move-in-ready homes. Most new home-buyers do not want to hassle with searching for a reputable contractor, or having to face paying the exorbitant costs that come with renovating a home, such as Hawaii’s higher labor and materials costs. While small improvements can make a significant impact, major renovations don’t always guarantee a higher sale price—especially when factoring in Hawaii’s higher labor costs and limited contractor availability.
If you decide to make upgrades before listing your home, focus on improvements that buyers in Hawaii value the most:
1. Kitchen Upgrades
-The kitchen is the heart of the home and where everyone tends to congregate at. So, the focus of a kitchen upgrade should be towards modernizing it.
-Your best ROI for a kitchen upgrade is replacing outdated appliances, cost-effective cabinets such as refacing vice replacing), and adding quartz or granite countertops.
-***What to avoid: Full remodels can be costly and your ROI may not pay dividends, so it’s best to focus on cosmetic improvements if no major repairs are needed.
2. Bathroom Updates
-An updated bathroom with modern finishes can pique a buyers interest
-Your best ROI for a bathroom is new fixtures, reglazing tubs, updated vanities, and replacing outdated tiles.
-***What to avoid: Do your best to stay away from luxury renovations. Especially those that do not match the home’s overall style or the neighborhood.
3. Energy Efficiency Improvements
-Hawaii’s energy costs are painstakingly high, energy-efficient upgrades is another upgrade that will appeal to buyers.
-Your best ROI is installing solar/PV panels. Especially if owned, do your best to stay away from a leased PV system.
4. Curb Appeal and Landscaping
-First impressions matter, and with Hawaii’s beautiful outdoors nothing is more of a turn-off than an unkept or unfinished yard. Wow buyers with a nice green lawn, accented with beautiful native plants, such as ti leaves, hibiscus flowers, and top it off with a puakenikeni plant which gives off a magnificent scent.
-Your best ROI is fresh exterior paint, replacing or refinishing an old worn out front door, power washing the driveway, and as stated beautiful landscaping.
-***What to avoid: Over-the-top landscaping that is high maintenance or bright exterior colors that will make the home stand out for the wrong reasons.
5. Flooring Enhancements
-When a prospective buyer walks into a home the first thing they tend to notice is the flooring.
-Your best ROI is updating the flooring with luxury vinyl plank (LVP) or engineered hardwood. These types of flooring are highly desirable due to their durability and resistance to Hawaii’s tropical weather.
-***What to avoid: Wall-to-wall carpet, which does not hold up well with the tropical weather or homes with pets.
6. Outdoor Living Spaces
-Many buyers want an outdoor area that is perfect for entertaining.
-Your best ROI is updating a lanai space with fresh flooring, adding a pergola, creating a space with functional seating, and adding a dedicated area for a grill or smoker.
-***What to avoid: Expensive outdoor kitchens, unless you’re in a luxury market.
When should you skip renovations and sell As-Is?
-If your home is in good condition and the market is trending towards a sellers market, you may not need to renovate.
-If major repairs are needed, you may consider offering a seller credits instead of performing a renovation prior to listing.
-If an investor or someone planning to renovate themselves is interested, then forgoing the renovations yourself would make more sense.
Final Thoughts
Before deciding on whether or not to renovate, consider what the current market trend is, buyer demands, and your budget. Minor cosmetic updates often provide the best return on investment, while major remodels don’t always pay off. If you’re unsure, consulting with a real estate professional can help determine the best strategy for your home.
