| Thinking
of selling your home? There are two reasons for pursuing
home improvement projects:
A. 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.
B.
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. |
