Often as real estate agents we meet with sellers that that are shocked to hear the renovations or remodel they did on their home is not worth what they thought they would be. The home owner could have went way overboard renovating their home…..or, they did some very poor workmanship on their own… or made some seriously bad choices in regards to renovating and remodeling . Lets talk about smart renovations. Or renovating with a future sale in mind.
Any renovation you do, you should be asking yourself what this will do to the future value of your home if you want or have to sell. If you don’t know ask a local agent.
All too often I meet with a seller and they are either angry or disappointed that they can’t get the money out of the home that they put into it. This is where smart renovations come in.
The first thing to do is determine is this your forever home or is it transitional? If its your forever home do what ever the heck you want with in reason. And forever I mean 15-20+ years. After about 20 years you will have fully enjoyed and amortized any renovations you have done.
Lets face it a bathroom or kitchen that was renovated 20 years ago is probably outdated now anyways.
When doing any renovations , while you may not get out every dollar you put into it, don’t forget the enjoyment you have received over the years by doing the renovation.
But lets be realistic. Whats the chances you will live there forever? Life changes quickly sometimes. And, you don’t always know whats around the corner. Jobs change, growing families etc…. There is nothing worse than looking at a seller who just finished renovating their house but now they have to sell because of a job transfer and have them find out that all those renovations cost way more than we can get for them.
Did you ever here the advice don’t buy the best home in a neighborhood? That is not a cliche. There is substance behind it. So don’t be the best home in a neighborhood.
Keep your renovations with in what is average and reasonable for your surrounding neighborhood and similar sized homes. Especially if your adding on!
Don’t double the size of your house if your house already is the same size as everyone of your neighbors.
Think of the overall value of the neighborhood. If you exceed that value of the neighborhood, the surrounding home values will drag you down. If you reach that point seriously consider moving and buying the home that suits your current needs in a neighborhood that can support higher values.
When it comes to renovating stay mainstream and make choices that seem to remain timeless.
Ok this is extreme, but people do do things like this. I walked into a center entrance colonial and smack dab in the middle of the 24×24 family room with a cathedral ceiling was a massive jaccuzzi. The seller had cut a hole in the floor and built up from cellar floor to support it. Never mind the moisture that permeated the whole house.
Now that is a highly personal choice that I would say it would be near impossible to find a buyer who wants a party size jacuzzi in the middle of their family room.
I had another client who spent a ton of money on a 50′ x16′ deck. They refinished with all Trex product as well just prior to selling. All told it was an incredible amount of money they spent. At the end of the day they couldn’t understand why they could not recapture all of the money they put into it over a 17 year period. What they spent was about 25% of what the house was worth. A personal choice to have a very large deck but not one they could recapture the money on.
Stay mainstream with your choices. Keep the appeal of your home as broad as possible.
Think about the olive green and the goldenrod appliances in the 70’s…. eek. Been there and done that. But the whole time white appliances, while not always a first choice, have not gone out of style.
What about faux paint from the late 90’s early 2000’s. That was fad that came and went as fast as you could blink an eye. While recently we have gone from soft warm whites to taupes to now greys, most people would find that any of those colors acceptable today.
Or for a small period of time terrazzo tile was in. A fad that was short lived. It looked out dated as fast as it went down.
As Margaret Innis of Decortate to Sell points out “trends have been around for two seasons or more”. Don’t jump on design trend that has no staying power, it is just a fad!!
There are hardly any renovations that you can do today as a home owner and get out the full value on resale tomorrow. Check out this Cost Vs Value report from Remodeling Magazine.
It is easy to go over board when planning a renovation or remodeling project. Put a budget together that is reasonable to help retain the value in your home and stick to it. A moderate kitchen remodel, keeping the current cabinets and painting them while swapping out the counter tops, flooring and fixtures could serve you better financially than a full kitchen renovation where you are moving walls, plumbing and electric.
Keep your finishes inline with what is standard and typical for your homes price range.
This is where a real estate agent can help you. They can assess what the value of your home would be after the renovation or remodel. Than as the home owner you can decide if the project is worth moving forward with or not.
Anytime you are planning a major renovation or remodel think about how it may impact and flow and the appeal of a of your home.
No one wants a family room addition where you need to walk through a bedroom first to get to it. Or what about the family room in the attic? Not what most buyers want. They want to access to a family room right off the kitchen.
I also suggest you think strongly before removing a bedroom and a closet for an addition unless you are replacing it in the addition. How often are sellers shocked to find out that removing that third or fourth bedroom to make a bigger master actually ate into the homes value rather than enhanced the value.
And guess what, while the difference between 2, 3 or 4 bedrooms is quite a bit of money when comparing homes, there are only few buyers who want 7 bedrooms. You get past 4 or 5 bedrooms and the value of each bedroom is insignificant.
And, please, please, keep your garage a garage. Garage space is desirable for most buyer’s.
All too often sellers will make choices that detract from the original appeal and/or flow of a home, which than can seriously detract from the future value.
If you are inclined to take on some projects yourself, assess your skill level. Just because you can tape and mud sheet rock, it doesn’t mean you should!
There is nothing worse than a homeowner spending time and money on a project only to come out looking terrible. I go into homes all the time with work done by a homeowner that is sub par. Buyers will notice and worse yet if a home inspector calls out the work as being unprofessional or worse yet a hazard or unsafe it will really dig into your pocket.
Often as agents we will see newer laminate floors installed improperly, or a kitchen or bath tile job with the gaps all over the place and no straight lines. Asses your skills before starting a project. And, for the love of god, finish the project! Don’t leave it 90% done.
Make sure if you are going to take the time and spend the money on materials you can properly handle the task ahead of you. It can cost you dearly when it comes time to sell.
With any project around the house, whether you hire a contractor or do the work yourself, make sure you get the permits. Cheaping out on the permits can lead to big trouble later.
A good buyer’s agent will have a field day if you did sub par work and didn’t get permits pulled on a deck, an electrical panel or other types of major improvements. As soon as a home inspector call it out as deficient they are headed straight to the to check on the permits.
If building permits haven’t been pulled, they will ask you go thru the process of repairing any deficiencies and having a permit issued. A buyer’s agent is not going to let a buyer pay full price for inferior or even worse unsafe or hazardous work. Getting the town involved on projects after they have been completed can be a real nightmare and costly.
I just touched upon some topics briefly here. When it comes to do some renovations think smart. What will this do to the future value of the home?
But also don’t be mistaken. Some homes can handle $100’s of thousands of dollars in renovations and still be worth more than what was put into it. Typically these homes are the least expensive homes in desirable neighborhoods.
It is also important to keep your home updated to retain maximum value Buyers want updated homes. The point of the article is make smart renovation choices.
Money is not the only consideration. Part of why you are renovating is so you receive enjoyment out of it as well. Amortize your enjoyment against the cost of a project.
Just be smart about your remodeling and renovations choices. Of course we are going to assume that all work is completed with the highest level of workmanship and all permits are pulled. But think about:
Use your local agent as a resource. They can tell you what removing that bedroom might cost you or how a master addition will effect the value of your home as it sits. They can advise you if the renovation is a good choice or if you are better off moving to home that will have the amenities you want.
If your concerned about the value of your home when it comes time to sell put some thought into your project before going off and doing any major renovations or remodels that cost a significant amount of money.
This article about Smart Renovations is written by Kevin Vitali of EXIT Group One Real Estate. Need help buying or selling a home? Give me a call at 978-360-0422 or email me at firstname.lastname@example.org
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