Many families make hard decisions, such as, do we pay for renovations to sell our house and tell our child they have to wait a year to go to college or wait to sell the house? Consider this, only 6% of students enroll in college after taking a year off from high school. This is a scary notion when you realize how much more a college graduation makes in their lifetime compared to a non-college graduate.
In this article, I want to help you realize how expensive it can be to update your home by comparing home repairs to another large expense, college. Once you have all the information, you might think twice about massively renovating your house, and instead, choose to sell your house without updates.
Cost of College
Have you ever heard the saying “college isn’t cheap?” Well, it’s because the average four-year college tuition ranges from $37,640-$129,640. This doesn’t include the cost of books, a laptop, food, housing, laundry, transportation, parking fees, personal expenses and more. Students living off-campus can save when it comes to laundry and housing but instead will pay for gas and parking fees. To help you get an idea of tuition costs, here’s a table showing the average cost of a student’s tuition and fees.
These costs might seem high, but keep in mind that the average high-school graduate earns around $30,000 a year vs. the average college graduate earning $50,000 a year. If you estimate that a student enters college when they’re 18, goes to school for four years, enters the work force right after, and retires at age 63 (U.S. average retirement age); the college graduate will earn an EXTRA $820,000 in their lifetime!
Cost of Home Repairs
Now, let’s look at the cost of renovating a house to sell and how much profit you’ll earn with the renovations. Depending on the type of renovations you’re choosing to undertake, profitable renovations can cost up to $54,000 or more. I mention the word profitable because different renovations will give you a different return on your investment (ROI). Here is a table of the top 15 most profitable renovations, how much they cost, their return percentage, and their net profits.
Keep in mind these percentages may change if more than one renovation is done with another.
I’m guessing you’re looking at these numbers and thinking “this isn’t what I expected.” Renovations are expensive and most people don’t think about the realistic costs till half way through a renovation. Furthermore, most people don’t think about where their money would be better spent. If you compare the ROI of renovating a house vs. a student entering college without a gap year, it’s clear to see which investment will give you a better return.
Which would you choose? Your child earning $820,000 more in their lifetime or a family room addition that will cost you $54,000, lose you $9,180, and a 94% chance that your child will never graduate from college?
If you’ve found yourself making a tough decision like this and still needing to sell your house, don’t worry you have options. You can sell your house to a real estate investor and use part of the money for your child’s college tuition. This means no renovations and selling your house quickly.
But keep in mind, all real estate investors are not equal. A small company or inexperienced investor can waste your time and money while they try to gather enough cash to pay for your house. An even worse situation, this investor will waste your time and money, then back out of the deal at the last minute. At Express Homebuyers we believe that you shouldn’t take a risk when it comes to such a large investment. We have purchased over 2,500 homes since 2013 and have an A+ Better Business Bureau rating. If you would like to find out more about this option, give us a call or fill out the form found at the Express Homebuyers homepage here. It only takes 7 minutes to get you a fair cash offer on your home. What are you waiting for?