When remodeling or improving your home, you should stop and look at the future before you make any decisions. Some day, your investment will have to be sold. And you will want to get as much out of it as you have put in it.
There are things that just hurt a home when you are trying to sell it. These are items that really seem important to you, but the majority of buyers don't want.
The number one example is a swimming pool. I would love to have an in-ground swimming pool at my house. But I know that it would not be a good investment.
It is expensive to clean, maintain and buyers aren't looking for swimming pools. Buyers don't want the troubles or the energy bills that come with swimming pools. Lenders don't include pools in the mortgage appraisal, so it really has no value to your home.
Another thing that can hurt you is overexpanding your home. Yes, buyers are looking for space, but you can have too much space. If you add on a family room, you are likely to see a 83% return on your investment. It costs you when you don't get back 100%. Adding a master suite to a home will grant you a recovery of only 80% of the cost of the addition.
It gets even worse if your additions make your home much larger than those in your area. This hurts your appraisal value, as there are no other homes of your size to compare to.
You shouldn't go too crazy with your changes either. Yes, there are a lot of people that would find a basement that looks like an old-time western saloon quite charming. But would they want to buy it? What if the basement was extra storage and a family room instead?
You would think that a home office would be a good addition. So many people work from home. Yet, it probably isn't wise to totally outfit a room to be an office by installing a workstation and office storage. You will recoup an average of 73% of your investment, according to the National Association of Realtors.
Another thing to avoid is doing too much by yourself. Shoddy or handmade workmanship will not benefit you. I know a couple that painted their brand new home themselves. The job was not great, as you can see paint on the ceiling throughout the home. Plus, the colors are quite unusual. To sell their home, they may find that it would have been better to have a professional paint in a neutral color scheme.
Try to keep your decor in your personal belongings, not the home itself. Faux finishes are lovely, but if they are too unusual, they may be a sticking point. You may love unusual colors, but remember, hot pink walls are not for everyone.
When you know you will be selling your home, it helps to spend your time only on renovations that will pay you back. Do the most important projects first.
The projects that show the greatest return at resale are improvements to siding, windows, kitchens and bathrooms.
A midrange bathroom renovation can give you a 102% return on the investment. An upscale bathroom renovation can recoup 93% of the cost. A midrange kitchen improvement will recoup approximately 91% of the cost. Minor jobs return 99%.
Keep in mind that the most important improvements aren't those that add to your home, they are those that maintain the home. Make sure the paint is in good condition, the gutters are clean and the lawn is kept up. Keep track of annual checkups, such as the heating and air servicing, and make sure you include the info when you are trying to sell your home. A well-maintained home is always a good seller.
Martin Lukac represents RateTake Refinance Rate marketplace. RateTake matches consumers with multiple lenders offering low rates. Got too much credit debt? Get Debt Help and you'd be surprised what we can do together.
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