WHICH HOME RENOVATIONS PAY OFF WHEN YOU SELL?
Some projects pay you back handsomely while others make your house tougher to sell. You're set to install a lavish swimming pool in your yard and build a multilevel deck overlooking it. You're spending big bucks, but you'll recoup your investment when you sell, right? Well, maybe. It depends in part on how long you stay in the house and what's important to potential buyers. Some home shoppers will love the pool; others might consider it a nuisance and want to have it filled in. Not every "improvement" will mean cash in the bank. So before you start planning your next project, here are the financial angles you need to think about, and some potential goofs you should avoid.
Consider how long you plan to live in the house
Most home-improvement projects make poor investments if you plan to sell your house within a year. In that case, it's smartest just to make sure the property looks attractive and well maintained. That means focusing on "curb appeal" renovations, such as repairing broken steps, replacing cracked windows and rusted doorknobs, and giving the house a fresh coat of paint. Small things like that affect whether people even want to go inside the house. But don't go overboard with other renovations. The only major home improvement likely to pay back every cent within a year - with the possible exception of an exterior paint job - is a kitchen remodel. That includes replacing the stove, countertop, sink, faucet, floor, and cabinet doors.
Don't create a mansion in a neighborhood of small ranches
Extravagant additions could spell doom for your investment return. No remodeling job should run more than about 10 percent of your house's current value. The one exception would be if it were cheaper and less disruptive to remodel than to relocate. It's fine to bring your house up to modern standards, and up to the average value of other homes in the neighborhood. But if you live in an area of older homes, don't jazz up the kitchen and other living spaces with unusually high-tech appliances that will price your house out of the local market. You won't come close to recouping your costs! To get a better idea of what features buyers want, look at new houses in your town. The new-house market is your competition. Try to tailor your renovations so they bring your house closer to the designs of new homes. For example, some new houses have a "great room" - a combination kitchen/den/dining area. If you plan to remodel your kitchen or family room, consider knocking down walls to create an open floor plan. When you're ready to sell, your house will have the airy layout buyers like.
Written by : LARRY BALLARD, Broker/Owner, Total Solutions Realty, LLC.
Serving the needs of the Naperville, Plainfield & Oswego areas