| Many people make improvements or modifications | | | | paint, and maybe dropping a new laminate |
| to their homes. Some are made to increase the | | | | countertop in as well. That might be OK in a lower |
| livability of the house, other are made to increase | | | | priced neighborhood where that is the norm, but |
| its value. Still others are made to put the house | | | | doing that in an area where the other homes |
| back into working order. | | | | sport granite counters and high end cabinets |
| First, I think that improvement needs to be | | | | around expensive appliances is a bad recipe. In this |
| defined. There are a lot of things one can do that | | | | example, the seller might have spent $8,000 on |
| "improve" one's home, however many of these | | | | the "mini-renovation," but to bring it up to the |
| items are not really improvements. A good | | | | neighborhood norms would cost a buyer $20,000. |
| example is replacing the HVAC system. Even | | | | The buyer will be looking to buy the house at a |
| when it is replaced with a newer, better, more | | | | price low enough to allow them to spend that |
| efficient system, that isn't really considered an | | | | $20k... that means that the seller may not even |
| improvement. The same would be said of a new | | | | be able to recoup the $8k they spent. |
| roof, windows, or even appliances. I know that | | | | The flip side of this would be spending $20,000 to |
| appliances are throwing a lot of folks. Those | | | | redo the master bath in a $200,000 home. Unless |
| would be considered repairs, or possibly upgrades. | | | | the room was trashed, and it needed major |
| However, they are required systems, and their | | | | infrastructure, the seller is not going to see that |
| functionality isn't changing. The line between repair | | | | money again. Even if it was, the seller can kiss |
| and upgrade may be a fine (and fuzzy) line, but | | | | most of that money good-bye. |
| generally upgrading would be putting something in | | | | If one is doing a kitchen gutting remodel, they |
| that is a little "better" than the neighborhood | | | | should expect to spend around 10% of the value |
| average. An example would be putting on a "50 | | | | of the house on the kitchen, or a little more. This |
| Year" roof shingle when most of the other | | | | would be the cabinetry, appliances and countertop, |
| homes in the area are using a 30 year material. | | | | including labor. Bathrooms are tougher to gauge, |
| The same would be true of a higher quality | | | | but I would say that one should expect to spend |
| window or HVAC system. Generally, this type of | | | | a similar amount to a bit more for all of the |
| work maintains the value of the property. It won't | | | | bathrooms combined. However, seeing the |
| really increase it, but if the systems aren't up to | | | | master suites and the more extravagant |
| at least area norms, the value will be negatively | | | | bathrooms that many newer and higher end |
| affected. The upgrades may give a little value | | | | homes may have, that could be off. |
| bump, but their main value will be that they often | | | | Other rooms in the house are just up in the air. |
| speed the sale of the property. | | | | They are easier for the buyer to change to suit |
| The next fuzzy line would be updating. Taking an | | | | their needs, and usually only need to be painted or |
| old kitchen or bath, and putting in new fixtures | | | | have the floor refinished or re carpeted at most, |
| would be a great example of updating. Keep in | | | | if the basic size is there. Small rooms are difficult |
| mind that updating usually wouldn't involve tearing | | | | to fix. |
| out the cabinetry or dropping walls and | | | | Don't forget the landscaping. From the curb, the |
| reconfiguring the house. Updating is usually | | | | house needs to be inviting and neat. It also |
| considered improvement, and will increase the | | | | shouldn't look like it needs a full-time gardener to |
| value, and possibly decrease the time on the | | | | keep up. Most buyers want the look of a finely |
| market. | | | | designed yard... and to only have to spend 30 |
| Finally, the real meat of improvement is | | | | minutes a week keeping it up. |
| renovation. This should be reserved to properties | | | | The bottom line is that to properly improve a |
| that are getting extensive work. I see | | | | home for resale, one needs to have an overall |
| "renovated" properties all of the time that are | | | | plan. Appropriate levels of trim need to be used, |
| minimally updated, but retain outmoded cabinets | | | | as pinching the wrong pennies can be very |
| and other items. These really aren't renovated, | | | | damaging to resale. Finally, I always tell people that |
| and the money that was spent to do something | | | | they should not wait until sale time to repair |
| halfway may have been largely wasted. A great | | | | renovate/upgrade/update their home. That way, |
| example would be throwing some entry level | | | | they will have the opportunity to enjoy the |
| stainless steel appliances in to the kitchen, and | | | | newer, more pleasant environment. |
| then painting the 30 year old cabinets with wall | | | | |