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Home Improvements
There are two reasons for pursuing major home improvement projects:
A. You want some new features in a home to improve your family's
quality of life, but you don't want to leave your current home.
B.
You want to make your home more marketable to maximize return (or minimize loss)
and speed up the sale process.
In the right market conditions, a
project might fit into both categories. Other times, though, the two approaches
will conflict:
Just want to do it In situation A, the project is
perceived as a necessary or worthwhile improvement to your family's lifestyle.
Say you have two or three teenagers in the family and the morning bathroom
situation is completely out of control. It doesn't matter if an additional bath
generates a 150 percent return on investment or actually decreases the value of
the home (unlikely, unless you're a completely incompetent do-it-yourselfer with
a bizarre design sense). The economic impact just doesn't matter. If you have
the money for a new bath and you don't want to move - you add the bath. It's
that simple.
Or say you're a barbecue fiend and the only feature missing
from the dream home you've just purchased is a sprawling backyard patio with a
natural-gas grill custom-built with flagstone and river rock. Again, return on
investment just isn't going to be a critical question. The improvement becomes
more comparable to purchasing a depreciating asset that you feel is a necessity
for your lifestyle - such as an automobile. When the barbecue aficionado adds a
deluxe patio to a home that's already the most expensive property in the
neighborhood - perhaps destroying the entire backyard in the process - there's a
good chance that very little of the cost will be recouped in a subsequent
sale.
An even better example might be a pool. If you're a person who
simply has to have one - fine. Put in a pool. But it's probably worth checking
with a real estate professional first, just to make sure you fully understand
that adding the pool might actually lessen the property's value and make it more
difficult to sell should you later decide to move. That's the reality in many
markets. That doesn't necessarily mean you shouldn't do it, especially if you're
planning to live in the home for the rest of your life. It just means it's worth
knowing the cost and salability impacts at the front end - even if they're not
going to deter you from pursuing the project.
Really need to do it The "type-B" home improvement
project is pursued primarily to increase the property's salability. In turn,
this often increases your return on investment. A good real estate agent can
advise you of possible improvements that will attract more potential buyers and
also pay for themselves either through increasing the home's value or through
shortening the time it takes to sell the home.
Here we're typically
talking about projects such as: painting - either because the existing paint is
in bad shape or is an unusual color; replacing carpets - again because of age,
color or style; repairing or resurfacing a cracked driveway or sidewalk;
refacing kitchen cabinets; and trimming or removing overgrown or unattractive
landscaping.
While spending several thousand dollars on your home right
before you sell it might not sound very appealing, it's not uncommon for the
right work to more than pay for itself in a higher selling price and shorter
marketing time.
Consult with an experienced real estate agent to learn
what improvements will make your home more marketable in comparison to similar
properties that are now - or recently have been - on the market in your
area.
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