 If
you've ever been to a home center on a Saturday morning then you know
just how crazy people are about making improvements to their homes. We
all seem to have an on-going need to enhance our surroundings. Whether
they're spending money on improving their landscaping, upgrading and
changing their interiors, or actually completely renovating, most people
believe that what they spend will give them an equal increase in value.
But that is not necessarily true; unfortunately, cost does not equal
value.
"Wisely done upgrades to flooring, kitchens and baths make homes more
marketable, therefore adding value," said Brandon Harrington of
Harrington Appraisals located in St. Leonard. "Finishing a basement will
not only give you more space to live within, but it will give you a good
return on your investment, especially if you do the work yourself. The
cost of labor is often hard to recover in value."
Harrington also said that upgrading your floor to hardwood or tile will
definitely add not only visual appeal, but will usually give you more of
a return on the cost of the improvement. Adding trim throughout your
home, whether it be crown molding, wainscoting, chair rail, or casing
around windows will also give you a similar return.
Tiling your kitchen back splash will also give you financial benefit.
Kitchen and bathroom improvements will normally give you a pretty good
yield, as long as you watch the level of the upgrade. Harrington said,
"Replacing the counter tops in your kitchen with mid-level granite will
more than likely give you a good return, but replacing it with an
extremely expensive type of granite may not."
"There is a point that at which upgrades will not continue to add
value," he said. The sky is the limit when it comes to kitchen
improvement opportunities, between high end appliances, incredible
cabinet choices, and endless counter top decisions; it is easy to over
spend on a kitchen.
Harrington had one customer who had spent nearly $200,000 on a new
kitchen and was surprised when the value of his home did not reflect the
full investment. Unless you are building a multi-million dollar property
where high upgrades are expected, that would be an over-improvement for
most price levels.
Keep in mind that when you are working on your home; most improvements
you make will improve your quality of life. Don't make your choices
based on increased value, but rather increased usability, convenience
and pleasure. Just remember that enjoyment when you go to sell your
home. This is when many people get in trouble. They forget that they
added a $60,000 pool for the pleasure of the relaxation and family time
together. They expect to get an equal increase in value, and that isn't
going to happen.
If your intention is to sell your house and you are trying to make the
best improvements for marketability, that is a different kind of home
improvement. While making particular improvements might not yield an
increased sales price, it will make you a better competitor in a very
crowded sales market. Those improvements might include replacing
interior doors, painting cabinets and adding new hardware, new front
door landscaping and painting.
A fresh coat of a neutral colored paint will give you a good start on
curb appeal.
Replacing light fixtures and bathroom accessories will go along way
without much expense.
Making home improvements is a national pastime, almost as American as
apple pie.
It makes us feel good not only about ourselves, but about the homes we
live in. Just remember if you hope to recover some of the costs of these
improvements you need to make wise decisions; increased value will not
be determined by how much you spend, but rather on the choices you make
that are desirable to others.
Since it is part of our heritage, you may as well start with the
enhancements that will give you more of a return on the money you spend
starting with flooring, trim, kitchens, baths and basements. But more
importantly, make the improvements that will give you the most
satisfaction.
Selling your house? Improve your Marketability
o Plant shrubs and add mulch (In the longer term, landscape in an open
manner that won't obstruct the view of the house in the future)
o Paint the front door and replace aging hardware
o Update faucets, light fixtures
o Update appliances
o Replace trim. Add chair or crown molding
o Install an extra-large water heater
o Install new storm windows and other energy-saving products
o Wire a spare room into an office (Some new homes include two,
ready-to-connect offices for the two-professionals families)
o Install hardwood or ceramic tile (Midrange products bring a higher
return)
o Add closets and other storage space or re-organize existing spaces
o Build a two-car garage
o Finish the basement
o Add a bathroom
o Remodel the kitchen
For charts listing the percent of costs recouped for improvements, visit
RealtorŪ Magazine at www.realtor.org.
The numbers are from a 2006 survey consulting more than 100,000 members
of the National Association of RealtorsŪ. |
