Upgrade costs

2013 costs and projected returns on investment for improving older homes:

Bathroom addition: $35,566; 58 percent return.

Bathroom remodeling: $8,000 to $12,000; 80 to 85 percent return.

Deck addition: $14,000; 68 to 77 percent return.

Minor kitchen remodeling: $17,000; 78 to 85 percent return.

Major kitchen remodeling: $54,241; 80 percent return.

Owners of older houses are not completely out of the game, though. Those built in the 1930s and earlier commanded closer to market value, the RealtyTrac report showed.

“The lower price point on older homesis not surprising, given many are in need of some rehab and are more likely to have maintenance issues,” said Jake Adger, chief economist at RealtyTrac. “But this also presents an opportunity for buyers willing to take on that older inventory. Those buyers can purchase at lower price points and face less competition from institutional investors.”

Welch said he advises sellers of older homes to be preparedtomakeupgrades, such as installing new electrical panels and plumbing, in case buyers insist on those im- provements. A 2007 report by the National Association of Home Builders detailed how quickly home components wear out:

10 years: Dishwashers, carpet, duct work.

10 to 25 years: Decks, asphalt roofs, linoleum or laminate flooring, water heaters, sprinklers, faucets, toilets, air conditioners, aluminum windows, paint, aluminum and steel gutters, other appliances.

25 to 50 years: Kitchen cabinets, roofs, wooden windows, electric heating, trim lumber.

Even though investment groups want to avoid houses that need repairs, they don’t seem to shy away from paying extra for homeowner association fees.

Communities that have been built since 1990 are more likely to have homeowner associations than many older neighborhoods, but the organized oversight that associations offer seems to appeal to investment buyers

Welch said he got a letter from an institutional investor seeking only homes within homeowner associations.

The competition between newer and older homes could become more pronounced now that the Orlando market seems to be shifting froma seller’s market to more of a buyer’s market. The inventory of Orlandoarea home listings has increased from a 2.5-month supply to a 3.8-month supply during the past six months.

If the market continues to head in that direction, Welch said, owners of older homes will have to compete even harder for buyers.