CHICAGO, March 10, 2020 /PRNewswire/ -- The Appraisal Institute, the nation's largest professional association of real estate appraisers, today encouraged homeowners to choose their renovations wisely to maximize potential return on investment.
"Making the right upgrades may greatly increase the homeowner's chance of a timely sale, not to mention maximizing their profit," said Appraisal Institute President Jefferson L. Sherman, MAI, AI-GRS. "The right upgrades also can drive up surrounding property values, improving the value of homes across a neighborhood."
Sherman shared that some home improvements may be "over-improvements," which can seriously detract from the value of a home, especially if the projects go above and beyond community norms.
"Real estate appraisers have the local market knowledge required to gauge how an improvement may affect a home's value," Sherman said. "While they can't make guarantees, appraisers can use their expertise and experience to help homeowners make wise decisions about which improvement projects to take on."
According to Remodeling magazine's most recent Cost vs. Value report, the projects with the highest expected return on investment are manufactured stone veneer, garage door replacement and minor kitchen remodel. Other projects with potential payoffs, according to the report, are siding replacement, window replacement and deck addition.
Sherman advised homeowners upgrading elements of their home to ensure that their property meets community standards, reflects neighborhood norms and complies with local housing codes.
He also noted that homeowners may find it best to hold off on big renovations if they're unsure how long they will be in their home. "The longer a homeowner stays in a property, the greater the opportunity for a return on investment," Sherman said.
By purchasing an energy-efficient product or renewable energy system for a home, the owner may be eligible for a federal tax credit based on EPA-established guidelines. (See the complete list of eligible products, including program expiration dates.)
Unlike real estate agents or brokers, appraisers have the expertise to perform a feasibility study, in which an appraiser analyzes a property, weighs the cost of rehabilitation and provides an estimate of the property's value both before and after the improvement. Qualified and competent appraisers, such as Designated Members of the Appraisal Institute, provide homeowners with the confidence to make necessary remodeling and renovation decisions that could be smart choices financially.
The Appraisal Institute is a global professional association of real estate appraisers, with over 17,000 professionals in almost 50 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Individuals of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designations. Learn more at www.appraisalinstitute.org.
SOURCE Appraisal Institute