Let’s say it costs $3,000 to make old hardwood floors look new again. That’s a lot of money, especially if your client is just getting the house ready to list. But of all the remodeling projects homeowners can do to increase the resale value of their property, refinishing the floors is at the top.
Of course, no one can predict with certainty whether the investment will pay off, but recent research suggests it will have a big ROI—most likely more than the cost of the project. New windows and a new roof are also cost-effective ways to get a higher sale price when a home goes on the market.
Research from the National Association of REALTORS®, in partnership with the National Association of the Remodeling Industry, analyzes the cost-effectiveness of almost two dozen remodeling projects. The findings are detailed in the latest Voice for Real Estate video.
Tax reform
The video also reports on why NAR is concerned with the tax reform framework that members of Congress and the Trump administration have proposed. The framework seems like a win for middle-income households because it calls for a near doubling of the standard deduction, but it also would eliminate the personal exemption and exemptions for dependents. Depending on family size, whatever gains one gets from the higher standard deduction would be wiped out by the loss of the exemptions. Meanwhile, the framework calls for eliminating most itemized deductions—including the deductions for state and local taxes—which means many households that now itemize would be better off taking the standard deduction. As a result, they would, in many cases, end up paying more taxes.
On the plus side, the framework leaves the mortgage interest deduction in place, but that’s not going to be enough for most homeowners to itemize. Without the state and local tax deductions, many would still find themselves choosing the standard deduction—and paying higher taxes as a result.
The video also looks at why 1031 like-kind exchanges are so beneficial to commercial real estate, why home sales are expected to drop despite continuing strong demand, and what to do to keep your transactions on track in the weeks after a natural disaster.
—Robert Freedman, REALTOR® Magazine
