Norman Schiff has been in the remodeling business for more than 15 years and he has a little advice for those contemplating improving their homes:
Don’t overdo it.
While Schiff may be delighted from a business standpoint to get a huge remodeling job, he knows that in some instances that may not be what the homeowner should be doing.
“Don’t overimprove beyond the average value of homes in your area,” Schiff warned. “You price yourself out of your neighborhood market. You can overspend and never get it back.”
For instance, if a house is enlarged to include five bedrooms and three baths in a neighborhood of three- and four-bedroom, two-bath houses, the improved property actually may become more difficult to sell, said Schiff, president of Custom Remodelers Inc. in Casselberry, Fla.
Lenders will give you a helping hand here, Schiff said. Most are careful about not lending on remodeling that would boost a home’s value beyond surrounding property, he said.
Marketability
But many remodeling jobs give the homeowner a big payback by increasing the value of a home and its marketability, Schiff said. Although all projects don’t recapture all the costs, many projects return to the homeowner a high percentage of the investment.
Improvements that boost marketability are an intangible that’s difficult to place a value on, Schiff noted.
“But it can be the difference between being able to sell a property at a decent price and maybe not being able to sell at all,” he said.
For instance, a home with a small, outdated kitchen that lacks storage and counter space may turn off buyers. That same home likely would be much easier to sell if it had a modernized kitchen with storage, work space and good lighting, Schiff said.
That may be one reason kitchen remodeling was the top project undertaken by homeowners in 1991, according to the National Association of Home Builders Remodelers Council, a Washington, D.C.-based trade group.
Other popular remodeling projects, according to the council, are bathroom remodeling, bedroom additions and expansions and family room additions.
Kitchens provide a good payback on the investment, according to Remodeling magazine’s 1992 remodeling Cost vs. Value Report.
The national average cost of major kitchen remodeling is $19,261. The average return on this investment is 94 percent, according to the magazine.
A minor kitchen remodeling project-including such things as paint, wallpaper, floors and lighting-with its lower cost provided a national average payback of 104 percent, according to Remodeling. The national average cost of minor kitchen remodeling is $6,234, the magazine reported.
The costs of kitchen remodeling can run the spectrum, according to the tastes, desires and pocketbooks of the homeowner, said Pat Betz, a designer and salesperson with Classic Kitchens and Baths Inc. in Maitland, Fla.
Dramatic results
The designer said many jobs involve modernizing kitchens in older houses.
These homes often had poor space-use planning. They lack storage and counter space and have poor lighting, she said. Improvements here can produce dramatic results.
“We have done some jobs where the before and after have been startling,” Betz said.
Expansion and upgrading of bathrooms also are popular with remodelers, she said.
“Many people want to add spaciousness to their bath,” she said. “Separate whirlpool and showers are popular and there’s a lot of interest in steam showers.”
Remodeling a bath can result in an 85 percent payback nationally, according to the cost versus value report. But if you add another bath to a home that has only one or 1 1/2 baths, the payback is even greater at 95 percent nationally.
However, not all improvements provide a return.
Homeowners contemplating a swimming pool should expect to get their payback in their pleasure in using it, said Schiff.
“Pools are very nice for some folks,” he said. “But don’t expect to get your money back.”
Schiff estimated a homeowner is lucky to recoup 50 percent of his pool costs. “It could be less,” he said.
A pool even can be a negative for some prospective buyers when a house is being sold, said Alan Levitt, president of Alan Levitt Building Corp. in Casselberry.
“For some people a pool is like a boat,” he said. “Their happiest days are the day they got it and the day they sold it.”
But outdoor decks are both popular and bring a good payback, Levitt said.
Remodeling magazine said the national average cost of a deck is $5,731 and the average recouped is 78 percent.
The remodeling business slumped this year along with everything else as the economy crawled slowly out of recession.
But Levitt, a past chairman of the Home Builders Association of Mid-Florida’s Remodelers Council, looks for improvement in 1993 as consumers regain confidence and make spending commitments.
The ever spiraling costs of new homes bode well for the business, Levitt said.
“I’ve been preaching for years that for many people it makes sense for them to improve the home they have rather than buy a new one,” he said. “They’ve paid their mortgage down. They’re in a neighborhood they like and presumably they’re fairly close to work and shopping. They can keep all that and improve their lifestyle at less cost than buying a new home.”
