To say that the Denver housing market is booming would be an understatement. The demand for older homes is at an all time high, particularly for new buyers. Particularly for Millennials, they can purchase at a lower price point if they are willing to do some upgrades themselves. There doesn’t seem to be much evidence that the market will be slowing anytime soon so, many are buying with plans to make upgrades right away.
The first thing to consider is that the cost of home improvement projects will never be less in the future. Even if you plan to do some of the work yourself, the cost of materials will continue to rise. With this in mind, it might be prudent to do the larger projects sooner than later to save money now. Certainly, things that are health hazards or safety concerns should be addressed first.
Projects that require skilled labor to ensure the job is done right would also move toward the top of the list. With a shortage of skilled labor, labor costs in the Denver area are higher than in other areas of the country. While I enjoy the DIY network and consider myself reasonably handy, I recognize my boundaries and some projects require experienced, skilled labor. Making sure the job is done properly by hiring a company with experienced labor that guarantees their work will protect you long term.
It’s important to note that not all projects will give homebuyers the benefit of an investment for better resale. “While renovating the kitchen and updating the bathrooms are both great improvements that can increase property value, making energy efficient upgrades will give you more bang for your buck,” according to Sacha Ferrandi, founder of Source Capital Funding, Inc. a real estate finance company. “As the number of energy efficient homes continues to rise, first time buyers and renters are beginning to favor these upgraded homes over traditional homes due to the potential long-term savings.”
Ferrandi recommends upgrading HVAC, water heaters, and windows -- these changes cost less than solar panels and are more likely to provide a positive return on investment when the time comes to sell. When you sell, you can recoup around 73% of the costs of upgrading 10 old windows with new ones, and your energy bills will be lower in the time before your move.
Homeowners are looking for improvements that go beneath the surface of cosmetic and want upgrades that they can enjoy and benefit from now and that will add to the resale value.