|
HOME
IMPROVEMENTS
There are
Two Reasons For Pursuing Major Home Improvement Projects:
- Just Want To Do It — 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.
- Really Need To Do It — 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.
|
