Whether you’ve been watching HGTV on weekends or admiring your friend’s new kitchen, it’s easy to get remodeling on the brain. You may want to remodel your home to make it more livable, but you also want to increase its value as much as possible.
Where should you start? We have some ideas.
Building Vs. Land
Before we delve into the dos and don’ts of remodeling in relation to value, let’s acknowledge the greatest general truth. It is the land itself that generally appreciates while a structure generally depreciates in value. As Mark Twain once said, “Buy land, they’re not making it anymore.” Countless re-articulations of Twain’s assessment can be found in numerous publications. This is an important truth to recognize–and difficult for many people.
This is why if it costs $3,000 to build a deck, it will not add $3,000 or more to the home’s value. The deck will immediately start experiencing wear and tear and thus immediately start depreciating. In addition, the new owner could just have built the same deck for $3,000 (and the chances are they would have built it slightly different to fit their own needs and preferences). They might also have chosen to spend that $3,000 in another way altogether. So no matter how you look at it, if you spend $3,000 on your home, you are mostly likely adding less than $3,000 of value.
So why then would you add that $3,000 deck in the first place?
Because it is something you would enjoy, so you feel it is worth the $3,000. And, perhaps when you sell the house ten years from now, you will get $2,000 more than you otherwise would have without the deck. So in reality you enjoyed that deck for ten years for only $1,000–or $100 per year. Not bad!
But I’ve Heard People Do Invest In The Structure
People may put money into a structure (such as re-painting or updating appliances) to get it ready for sale, but these do not appreciate the value of the home in the long-term as all remodeling is subject to wear and tear.
Here we are not discussing ways to ready your home for immediate sale–that is something that can be very specific to your neighborhood, time of year, real estate market, and other variables particular to your situation and should be consulted with your real estate agent. What we are focusing on remodeling your home in way that makes it more livable for you and your family while also retaining the most long-term value. In short, you want to make your house a home–and valuable real estate. Here are ways to do that.
1) Use materials that wear well. This not only includes strong materials (like granite) that maintain their look, but also materials that incorporate wear and tear into their look, like old-style hardwood floors.
2) Pick crowd pleasers. You may be a huge Chicago Bears fan, and want to tile your kitchen dark navy and orange. This is a strong statement that is expensive to change for future home owners. When it comes to things like tiles and flooring and other decisions that cover large surfaces, keep it simple and tasteful. (You can always paint an accent wall or get colorful furniture to show your undying loyalty to the Bears.)
3) Invest in faucets. Faucets are great across the board. It is one of the first things people notice in a kitchen or bathroom. Good faucets are generally very good for home value.
4) Choose appropriate lighting. There is a reason Hollywood dedicates large portions of film budgets to lighting as do professional photography shoots. Lighting sets the mood for nearly everything in our lives and the same is true for your house. Finding the right lighting that best fits your home and choosing the appropriate accompanying fixtures is key to maximizing your home value.
1) Pools are not only expensive to maintain, but they can also add to property tax without necessarily adding to the retail value. That does not altogether mean that you should not build a pool, but rather there are many factors to consider and you should really be set on a pool if that you build one. (Hot tubs and built-in aquariums are in the same category as pools.)
2) Specialized structures, such as a greenhouse or a chicken coop, can certainly be used by some people, but many won’t. So while you may have spent thousands of dollars on a small greenhouse, some potential buyers will look at it an eyesore. Even if such a structure does not detract from the property, other potential buyers will not see it as adding value, making it difficult to recoup costs.
3) Built-in electronics may not only date a structure but are seen as a headache by those not so technically savvy. A tech-focused buyer might have systems they prefer and odds that you’ve picked the exact right one are slim to none.
4) Quirky choices in the way of very bright colors, unusual materials, or anything overly artistic can turn off potential buyers. If you are going to stay in the home forever to enjoy, say, the recycled fish tank bath tub or the bright orange poured cement floor, have at–but if you are trying to add value, go for safer choices and reserve any quirky tastes for art, furniture, and other things that can move with you.
5) Wallpaper and carpeting are not only difficult to remove but can also date a space. There is definitely a reason home improvement shows use flooring and paint over wallpaper and carpeting!
6) Treehouses and other permanent playground items may be great for your kids, but they will not add value to your home. Not only do many buyers not have children, but it could be put in the eyesore category by those who aren’t going to use them. Even potential buyers with children may hold differing views on outdoor safety and recreation.
So making renovations to your home is great if you’re doing it only for yourself, but has to be approached carefully if you are approaching remodeling as an investment. Next post, we’ll talk about the top improvements you can make to your home to improve its value.