Home Improvements
My parents look like real estate geniuses. They recently the sold our home (the home I spent the vast majority of my childhood in) for $230,000. This seems like an average price for a decent home, but when you consider that they paid $24,000 for it in 1984, it seems like huge accomplishment.
How did they pull off this miracle? Home improvements. When they bought the place originally it was a rundown old student house (the structure itself dates back to 1914). Now it is a cozy home, with an eclectic mix of original fixtures and brand new amenities. It is truly remarkable.
However, it is important to do a little bit of research before you start adding value to your home. If you've ever seen the movie 'The Money Pit' starring Tom Hanks and Shelly Long, you know that Home Improvements, of not done cautiously and systematically, can be a disastrous ordeal.
Your Reasons for Home Improvement
The first piece of advice is never, ever try and renovate a part of your home, simply for the purpose of selling. You are incurring a huge risk here. The housing market can be volatile, and you never know which amenities are going to pay-off. If you renovate for yourself, you at least know you will get value simply by the enjoyment of the change. Your potential buyer may walk into the improved room, declare they don't like it, then change it immediately. They won't care if you just sunk $30,000 into it. If you are looking to spruce up your home a little bit, before you sell, just make minor cosmetic changes, like painting. They are fast, inexpensive and there is little risk. If you know that you will be living in a home for some time, but you also know that in the future (perhaps when all of your children move out) you'll be selling it. You should try and balance, which home improvements will pay-off the most, and which ones you would most like to enjoy. For instance, there is little point in renovating the basement, if you never go down there. It's better just to leave it a blank slate for the next home owner.
The following is a list projecting which home improvement initiatives often produce the best results upon resale value. Naturally these numbers are not rock solid. There are many factors including your local housing market and what kind of improvements you undertake.
Kitchen Remodel (minor)-125% Basement Remodel-98% Bathroom Addition-96% Kitchen Remodel (major)-92% Bathroom Remodel-90% Exterior Paint-90% Master Bedroom-86%
So, here you can see that home improvements to kitchens and bathrooms, pay excellent dividends. Not only that but they are often the most enjoyable changes for your everyday living.
Home Improvements with a Low Return:
Generally improvement of attics and basements yield a very low return, unless of course you do something radical. Then the risk is very high, but the return could be enormous. For instance, a tranquility tank is not going to appeal to many people, but if you find a buyer that is all about tranquility, you'll make your money back, and more.
Use Good Judgment
When do these improvements you should also use your better judgment in taste. Take a look around your neighborhood and see what kind of home improvements others have done. You'll want your home to be consistent. Both for conformity, and also because certain improvements are popular with different people, and you'll want to conducted them to match the pulse of your community.
You should also keep the original design of your home in mind. Be sure to use similar materials and building styles. A hybrid home of new and old can look daring and artistic, but most homebuyers are very conservative (it is a huge investment) and they may not share your artistic vision. No bold colors, no flamboyant design. Just be tasteful and respectful, and you'll be fine.
You're needs come first. So if you think that your will enjoy a bold flamboyant design go for it. Just try and limit the boldness and flamboyancy to the more cosmetic aspects of the home, i.e., furniture, paint, fixtures. Not windows and cabinets.
To really understand what home improvement is really going to pay-off, take a look at the following variables. They will give you a pretty good idea of what you should be considering when set out to do home improvements.
Size:
Just because something is bigger doesn't make it better. For instance, my parents live in a downtown neighborhood. Therefore, the figured those prospective buyers were looking for quality, not quantity. If they wanted a massive McMansion, they would have moved to the suburbs.
They decided to add a sunroom on to the back of the home instead of expanding the kitchen. This proved to be a wise decision. The eventual buyers asserted that the sunroom was one of the deciding factors leading to their decision to buy the home.
Kind of Improvement:
As was mentioned before, kitchen and bathroom home improvements often yield the best pay back. And turning a basement into whatever yields the lowest.
Scope of Improvement
Often with home improvement, the small changes often add up to more than the sum of their parts. The larger the scope of the home improvement, the more risk you will incur. That said, risk could turn into a high pay-off. You really have to know who your market is and what they are looking for. The following is a list of small changes you can make, which will make a huge difference:
Ceiling fan New doors Fresh paint Garden Sanded and stained deck and fence Wallpaper
Fad = Bad
What is chic today can be the stifled snicker-inducing mistake of tomorrow. Take into account shifting social values. For instance, public space is rapidly dwindling. People, more and more, are looking for space where they can casually entertain. There are no more block parties, no more picnics in the park. Take this into account. Add a deck, it is the new standard for home ownership.
Cost
Do not expect that if you put $20,000 into a renovation, you will automatically see $20,000 added to the value of your home. However, even if you only can recoup $10,000 of that, if you are there long enough you easily get $10,000 of use from a new kitchen. You should also think about doing as much of the home improving yourself as you can. Having a hands on approach will give you flexibility, and a new understanding of your home, that you can apply to other home improvement projects. It will also save you buckets of cash. BUCKETS!
Heavy Hitters & Light Weights New Windows Not a good resale investment at all. You can tell the buyer that you just added new windows, but that doesn't really matter. Unless you can demonstrate a significant savings on your electricity and heating bill there is really no point. Therefore, replace windows if they need to be, but never just before you are selling your home.
Swimming Pool Swimming Pools are much like their aquatic counterpart the boat. They have little to no resale value at all. Swimming pools are a luxury item that require year round care and large annual investments. It's kind of like if you were to buy a house where pets were included. They are a large responsibility. In fact, sometimes a pool will detract money from a home, as people will want to fill it in, and add that cost to the overall price of the home. So, if you want a pool, go ahead and get one, but don't assume it will add value to your home.
Creating New Space Whether this means taking space that was poorly used before, or adding an addition, it can be a good idea. It is often important to look at design before functionality in this case. If you are improving your basement, don't put in a bar. Instead leave the space open to interpretation. Leave it open, leave it clean. Like blank slate. The same can be said for studies, solariums and offices. Let the buyer decide.
Energy There are hidden long-term cost savers that are very inexpensive and give a great return on the investment. You might not be able to woo any higher offers of your home, but it is a positive talking point when you have a prospective buyer. The following is small list of things you can do that will save you money and help the environment.
High efficiency showerhead, 400% return on investment. Fireplace, 91% return on investment. Bathroom faucet aerator, 84% return on investment. Attic insulation, 69% return on investment. Fluorescent lights, 53% return on investment. Kitchen faucet aerator, 51% return on investment. Wrapping hot and cold water pipes, 48% return on investment. Duct insulation, 27% return on investment. Wall insulation, 18% return on investment. Floor insulation, 14% return on investment.
