Daryl Cohan joins me to discuss which home renovations’ return on investment are the best. Is it worth renovating a kitchen before you sell? What about adding a bedroom or a garage?
About our guest:
Daryl Cohan has been helping home buyers and sellers since 2001. She is determined to help her clients reach their goals and considers her role one of education. Her excellence in listening to her clients wants and needs have made her a “people’s choice” in the Boston real estate community
****************************************************
Thanks for listening!
Thanks so much for being with us this week. Please see the episode enhancement for this and other episodes at talkinghomerenovations.com
Do you have feedback you would like to share? Would you like to be a guest on the podcast? Email me at thehousemaven@talkinghomerenovations.com
If you enjoyed this episode, please share it with your friends
Don’t forget to subscribe to the show and get automatic updates every Wednesday morning with the latest episode of Talking Home Renovations with the House Maven.
Click here to get the episode enhancements sent directly to your inbox every week.
Reviews and ratings help my show gain traction and credibility. Please leave a review here-https://podcasts.apple.com/us/podcast/talking-home-renovations-with-the-house-maven/id1481716218
Visit Talkinghomerenovations.com for episode enhancements, containing photos and more information about the episodes as well as transcripts. There you can leave a voice message through speak pipe that could be included in a future episode.
Follow me on instagram: @talkinghomerenovations
Join me on Facebook: Talking Home Renovations
Follow me on Twitter: @talkinghomereno
Join me on TikTok: @The House Maven
Talking Home Renovations with the House Maven is part of Gabl Media, the largest, most engaged AEC network on the planet. Visit www.Gablmedia.com for great content.
Sign up for the weekly newsletter- I send out the episode enhancements every Wednesday morning, sign up here
Thanks to Ray Bernoff, the editor of the show. www.RayBernoff.com
Music at the beginning and end of the episode is The House Maven’s Jig, written and performed by Neil Pearlman, www.neilpearlman.com
Show Cover Art by Sam Whitewww.samowhite.com
This podcast is a production of dEmios Architects. www.demiosarchitects.com
Do you need a bit of design help? If you are in Massachusetts and need a second set of eyes on your design, my Ask an Architect design help-line can help. We meet on zoom for an hour to review your issues. Contact me for more information.
—
Listen to the episode here:
Renovation ROI With Daryl Cohan
Someone asked me to do an episode on which projects get the biggest bang for the buck. Which renovation projects are most likely to get a return on your investment first? I asked real estate professional Daryl Cohan to join me with some advice for homeowners.
—
Daryl, welcome to the show.
Thank you.
I appreciate you coming on. Tell me a little bit about you. Do you work for Keller Williams?
I do. I’ve been selling residential real estate for many years. I sell mostly in the Western suburbs of Boston.
That’s a pretty hot market. Someone wrote to me and asked if I would do a show about what’s the biggest bang for your buck. Before you sell your house, what do you get the most money back from? I have my feelings about it but they are based only on my feelings and anecdotal evidence. I thought I’d asked an actual real estate professional.
I have a lot of anecdotal evidence. Everyone’s first instinct is to say the kitchens and bathrooms are going to give you the most bang for your buck. Curb appeal and home maintenance are important. Get your gutters cleaned and make sure your leaves are raked. It’s obvious if you don’t do those things.
It makes people wonder what else you haven’t been doing that they can’t immediately say. I agree with you about the kitchens and bathrooms because if I don’t like it but there is a new kitchen in a house, I will feel less likely to want to rip it out and put it in my own kitchen. I’m less likely to buy the house because I don’t like the kitchen but it’s brand new.
There are buyers out there who are like, “I don’t want to pay for someone else’s new kitchen. I want my own new kitchen.”
That’s exciting to do your own new kitchen. We get to pick out everything and have it be the way you want it or as close as possible to the way you want it. I’d rather buy a house that has a trashed kitchen.
I’ve always preferred to do my own renovations rather than have them done previously.
If someone were going to redo their kitchen ahead of selling the house. Do you do something very neutral? I guess because otherwise, it would be too specific so it’s hard to know what to do.
It all depends on the price point. I’m a big believer in functionality. I like to open kitchen cabinets and see, “Where do these people keep their food? Does that make sense? Is there space for dishes near the dishwasher?” I’m concerned about functionality.
When you say curb appeal, what do you mean? Do you mean that they should paint the house? What does that mean exactly?
It means that it should reflect care and maintenance. Dead shrubs should be pulled out. Fresh mulch is always a big crowd-pleaser. If your swing set is old and you’re getting rid of it, get rid of it. Don’t leave that for someone else. Make sure your front walk is safe and there are no cracks. That’s important. One of the things that we’ve been saying in real estate for a little while is that your first showing takes place online. If your pictures don’t look great, you’ve already lost a chunk of the market.
Some of the pictures I’ve seen online, I can’t even believe they’re publishing them. Some of them are like, “What is this? Why would somebody not clean off the bed to have a picture of the bedroom taken?”
It’s funny. I’ve become much pickier about my pictures over time. Now, I know to check through doorways and make sure you’re not seeing things. Those are things I never thought of initially.
You get people ready to sell their house by staging it. Does that matter?
I’ll either bring in a stager, an organizer. Sometimes people need to have houses painted. Sometimes you don’t see the mistakes that you’ve made or you don’t see what you’ve lived with over time.
Sometimes they do. They designed it in addition and decide not to build it. I guess it’s a little problematic because technically, the ownership of the drawings belongs to the architect so that’s a little sticky but it does help to show potential and what could happen.
I always say that realtors are very good at spending everyone else’s money. They’re like, “You could do this and that.” Sometimes people do it and say, “You have such great ideas.” I always say, “That’s because I go into so many houses and see so many different things.”
Bathrooms also, you feel like that’s not worth redoing.
I wouldn’t redo unless it was really bad but I would freshen up. A new shower curtain and towels go a long way. Sometimes even changing the hardware on the vanity. There are little cost-effective things that you can do.
No real need to have a full-on bathroom remodel.
Probably not.
What else do you think would help to sell a house? Do you think people care about basements?
People care about space, functionality and livability. For example, if a basement is set up as a playroom, gym and home office space, people see how that space is used. That’s the whole beauty of staging.
What is the biggest bang for your buck, do you think on any renovations or you shouldn’t do them? In this market, it seems like you don’t have to do anything. You almost don’t have to clean up your house.
You do have to clean up your house. You can’t declutter enough.
What about in bad times or not when it’s a buyer’s market? Do you think that changes things?
Everyone’s first instinct is the kitchens and bathrooms are going to give you the most bang for your buck. But curb appeal is really important.
It does change things and that the expectations of the buyer are a little bit heavier but there are motivated buyers and discretionary buyers. As agents, it’s our job to figure out what our client is, how we can help them and keep them educated about the market.
What’s the difference between a motivated buyer and a discretionary buyer?
A motivated buyer wants to get into a house. They are willing to do some work. They may have a lease that’s going to be up or they’re expecting a baby or have family moving in with them out of town. They’re motivated. They need a house. A discretionary buyer is looking for the perfect house.
Everybody is different and some people want to move into something that is completely move-in ready. Would you bother emptying out the whole house, redoing the floors, painting all the walls and moving in minimal furniture after that? In this market, maybe it seems extreme. Would you recommend that?
It seems extreme in this market. One of the guidelines that I use and I made it up. I don’t think I’m the only one to use it either. I tell my sellers sometimes that they can spend up to 1% of the listing price getting their house ready. That could be a number of different ways. It could be getting a dumpster or hiring an organizer to help you get packed and do some painting or exterior repair work. I find that using that measurement is helpful. If they spend less than that, they are excited, “I spent less than that and I still got a great price for my house.”
What is the average selling price around the Boston area?
It’s crazy. Houses are selling for way over asking with multiple offers. It depends on the town. You can still buy a house for $600,000 or $700,000 and you can buy a house for $3 or $4 million. There is a lot of variety in the housing inventory.
From what I’ve seen, it does depend on the town but I live in Arlington, which is pretty close to Cambridge.
Arlington is pretty hot. Usually, people start their search in Cambridge and then end up in Arlington. I live in Needham so people start in Needham. Sometimes they end up going to Medfield or Natick if they get priced out of what they want in Needham. Buyers can do so much of their own research. It’s the realtor’s job to educate them and get them in the houses because things that look great online may not be as great as they appear.
If someone were probably moving within five years, what renovations would you advise them to do and not do? Which ones will they probably get their money back for?
Here is my true belief on this. If there are things that you would do to sell your house and you’re five years out, do them now so that you can enjoy it. Don’t do it because you’re selling your house. If something that you do is going to make your house more functional, let’s say cubbies in the mudroom, for example. You’re thinking, “The next buyer would like to do that but I want to do it. I’m going to be here for five years and that’s going to make the house more enjoyable for me and my family to live in.”
I often advise people that if they’re not planning on moving in the next few years to go ahead and do what they want to do. Have you seen anybody putting any money into their house and then regret it because it was considered to be something that’s been in the way of this selling quickly?
No. The only thing that people think is that they are doing things that they can then take with them when they leave. For example, “I’m going to plant some perennials.” They want to exclude their perennials. That’s crazy. People get hung up on stuff like that.
I can see how that would be tempting. I have a lot of perennials that I love. I found out that they were going to rip up the whole thing and put down grass, I probably would foolishly offer to take them with me. It’s hard to move plants like that. You have to have a plan. You can’t just go and put them in a storage area.
In that way, it’s important that the two agents representing the buyer and seller work together. It makes it a lot more pleasant for everyone. The people in the transaction, the buyer and seller, have a good feeling that everyone is working together towards the same goal.
If people are doing a big-ticket item for a renovation and have a limited amount of money to spend, would they be better off spending it on a master suite, basement fit-out or pool?
The pool is 6 of 1 half dozen of the other. I would immediately eliminate that from this list.
Unless you want a pool, the pool is seen as a liability.
It goes 50% either way.
The pool’s out so that leaves us, in this case, with a master suite, family room addition or basement renovation.
Everyone wants the open kitchen family room. That’s the number one thing that we see people asking for. They also want the bigger, the better. If you can land an airplane in your kitchen family room, you’re golden. Again, it goes to functionality and how that space is used. For example, during the pandemic, people were doing a lot of jigsaw puzzles. Is there a space to have a table for a jigsaw puzzle to be set up? Are we going to continue doing jigsaw puzzles? Who knows? If not jigsaw puzzles, a game table is always a great idea.
I always like to leave out my crafts so then I can go back and work on them for a few minutes instead of taking them all out and putting them out again but then I do live with other people who don’t appreciate that look.
For you, that’s functionality.
For me, it’s functionality but I also live with other people so I can’t do that all the time. If you’re going to have those gigantic rooms, which are the footprint of some people’s houses, I’ve noticed these family room additions, they’re huge like 19×26 rooms. I try to dissuade people from building something that big because it’s like, “Let’s put some furniture in it and see how you’re going to use the space.”
That goes to the functionality. I wouldn’t sacrifice, for example, people still like to have a nice backyard. If you’re building a 19 x 26-foot family room, are you sacrificing yard space?
You’d have to be because it has to go somewhere. I guess the question is, if there is more of it, then how does that all work into it? Family room addition, you’ll get some return on that.
If you build a master suite over the family room, you’ll get even more return but then you’re talking about a bigger investment. It all depends on fitting in with the neighborhood and being consistent. People sometimes like quality over quantity and they look for details, finished work, crown moldings and wainscoting.
You can spend more money on built-ins if you build fewer square feet.
Even on a design element, it seems like wallpaper is coming back a little bit. If you choose wallpaper, choose something that’s beautiful but not too personal. If you love soccer, don’t pick a wallpaper that has soccer balls because then you’re limiting the next user.
What is a source that people could look at? Is there something online that says, “Statistically, you get 80% back on a kitchen renovation or you get 40% back on a basement renovation.” I feel like I’ve seen sites like that.
Be a big believer in functionality when you’re redesigning your house.
The National Association of Realtors puts out a survey like that every year. I’m sure you could go to their website and find that information. Lighting is also a very big item that people look at. How much natural light is in the house? That’s something maybe you do something to add a window or make a window bigger as part of a renovation and a renovation that you’re doing so that you enjoy the house more.
The lighting is a great suggestion because it creates this whole atmosphere that makes it seem high-end to have nicer lighting.
Changing your overhead fixtures. First of all, it’s easy as pie. You can do it yourself. There are such great resources online to buy fairly inexpensive fixtures and it changes the look of a room.
I’m probably going to do that right when I sell my house because we still have the bare bulbs from years ago.
You can do it yourself, Katharine.
I have to do it. I would like to be able to enjoy it for a few years.
It’s one of those things that when people do to sell their house, they say, “I wish I had done it years ago so that I could have enjoyed this.”
I would encourage everybody to go ahead and do that. I lived in my house for many years with a big patch. Something had happened and we had to repair the wall. I can’t remember if it was crumbling around near the window for years. It was this green wall with a giant 2×1 foot patch of plaster. It was just like that. It bothered me and I thought, “I’ll do something about that.” Right before we sold it, we painted the whole room and it looked so much better.
I didn’t even know such a drag on my psyche to have this patch that felt broken and unfinished. I didn’t appreciate that fully. You look beyond it. You don’t see your mess but it makes sense to add bedrooms to an attic renovation, let’s say. Is that something that people get a lot of return out of?
It depends on the structure of the house. Are you adding a fifth bedroom up there or a bedroom and bathroom? What’s your threshold for that type of renovation? To put a bedroom up there without a bathroom, buyers now are going to be less interested in that.
They are expecting to have a bathroom near the bedroom on that floor. What about these families who used to live with thirteen kids in a three-bedroom house with one bathroom? They seem to survive. I don’t know. Maybe they’re not okay but they survived through it. You always hear that about the neighbors when you move into a new neighborhood. People talk about, “Back in my day, we could live here all thirteen of us.” Times change, I guess. What about ADUs, Accessory Dwelling Units? Have you been running into those? For my clients, people want more home office space and more private space that they can still have guests but they’re not in their home.
No, I haven’t run into that too much. The other thing is that I like to encourage people if they’re going to do some renovation to pick one wow factor and enhance that. For example, I saw a house that had built-ins in the garage. They were fabulous. People will pay a lot of money for that. More importantly, it gets them excited. I thought those garage built-ins were cool.
What other kinds of things like that? People love mudrooms.
Mudrooms, beverage centers or wine refrigerators. I have a house that I put on the market with a media room and a kitchenette in it. If you get hungry while you’re watching a movie, you don’t have to go upstairs. All these features that’s partly what’s driving the prices up but it’s also at that price point that differentiates your house from the next house?
Especially if there are kids involved. I remember going to see all these houses with my kids and they hated to be dragged around and look at all of these houses. If there were something cool like a popcorn maker in a media room, it would have been something they would talk about forever. Kids get excited about stuff and they influence people for sure.
Some houses don’t have garages but it only subtracts a certain amount of money from the sale. It would be more expensive to build it than the return on it. I was talking to someone about this. If you don’t already have a garage, there is no point in building it just to sell it so that you have a garage. That was her take. What do you think about that?
As long as you have a storage shed for lawnmowers and lawn equipment and stuff like that, unfortunately, some houses don’t have enough land for a garage or some people will eliminate your house just because there is no garage. If the house is fantastic and if the pictures are fantastic and they get you in the door, you might be able to overlook the fact that there is no garage.
Some people don’t park in their garage anyway.
Especially in some of the older houses in New England, the garages are so small.
Our garage was built in the ‘20s. Two people can’t pull in with the car and both get out, you have to choose which side is going to be able to get out.
Unless you got a sliding door minivan probably, which has a limited family life expectancy.
It’s too narrow for both doors to be open. It’s a problem.
Do you park one car in the garage and use the other side for storage?
It’s only about 10 x 18 feet. This is not a large garage. I always think of the old cars being bigger but I guess maybe they weren’t. We don’t usually park in there unless it’s snow season. We might park one car in there. When we drive in, we have to let the other person out first, drive into the garage and remember to fold up the mirrors.
You have to remember to do that. It’s the last step involved.
We had to back out if we forgot to let that other person out. It’s either that or you have to crawl over the seat. It’s not the best garage function-wise.
You loved the house and you were able to overlook that.
You can’t have everything.
I would say that you were a motivated buyer.
We didn’t have a home at the time.
Your first showing takes place online.
That makes you a motivated buyer.
We were living in an apartment nearby. We sold our house in Belmont and then we lived in an apartment and we’re looking for another house. Our house shares a garage with the neighbor. They were people who were related to each other. They built a combined garage on the property line. The left side is our neighbors and the right side is ours. That’s a little strange. There are always little things that are weird about a house most of the time.
I hope they’re not weird.
That’s a strange thing that people might think twice about like having a shared garage. What does that mean? What if you don’t like your neighbor and it’s not a lot of space? That whole thing.
For you, because you were a motivated buyer, that was something that you were able to overlook.
It’s not something I’ve loved about it but there is nothing else to be done because there is nowhere else for a garage.
One of the other things I like to encourage home sellers to do is to go to open houses of the houses that are in the same price range. They can see what their competition is and it sometimes will help them to make a decision of where to price their house before it goes on the market.
If you have a house that’s, let’s say $1.5 million, you’re putting 1% into getting ready. One percent of $1.5 million is $15,000. You could easily get a dumpster too for that and then paint the inside of the house. You could get new hardware for the vanity in the bath.
Maybe you only spend $10,000 but then you feel good about it.
That’s a good rule of thumb. For sure, you’re not going to do a new kitchen for $50,000. What is the number one renovation that almost always gets its money back?
Make sure that your roof is not an issue, some of the structural things because it’s not particularly exciting for a new homeowner to spend money on a new roof immediately. No one likes to have their friends come over and say, “Come see my new roof.” Maintenance goes a long way.
I always call those the root canals of architecture. You need it but you don’t want to spend the money on it. What about the air conditioning or energy efficiency of a house? Does that have any appeal to people?
Air conditioning is desirable. In some of the older houses, what they do is they put air conditioning on the second floor because they can run it down from the attic. You want it when you’re sleeping. That’s a functionality thing.
Daryl, thanks for all of the information.
You’re welcome. I hope it was helpful.
It almost makes me want to move. I don’t know why.
If you want to move, call me.
How can people get in touch with you if they want to follow along with what you’re doing? It looks like you’re on Instagram.
I’m on Instagram @DarylCohanRealEstateStory and on Facebook.
Thanks, Daryl.
Thank you so much for having me.
Important Links:
- Daryl Cohan
- Keller Williams
- National Association of Realtors
- Facebook – Daryl Cohan – Award Winning Realtor
- @DarylCohanRealEstateStory – Instagram