The Smart Way To
Look At Home Improvements
by: W. Troy Swezey
What home improvements really pay off when the time
comes to sell your house?
That’s an important question for any homeowner
contemplating moving or remodeling. And the only
possible answer is a somewhat complicated one.
That answer starts with the fact that really major
improvements – room additions, total replacements of
kitchens and baths, etc., -- rarely pay off fully in the
near term. It ends with the fact that small and
relatively inexpensive changes can pay off in a big way
in making your home attractive to buyers if your
decision is to move now.
It’s a simple fact, consistently confirmed across
America over a very long period of time, that even the
most appropriate major improvements are unlikely to
return their full cost if a house is sold within two or
three years.
Does that mean that major home improvements are
always a bad idea? Absolutely not. It does mean, though,
that if your present house falls seriously short of
meeting your family’s needs you need to think twice
– and think carefully – before deciding to undertake
a major renovation. Viewed strictly in investment terms,
major improvements rarely make as much sense as selling
your present home and buying one that’s carefully
selected to provide you with what you want.
Even if you have a special and strong attachment to
the house you’re in and feel certain that you could be
happy in it for a long time if only it had more bedrooms
and baths, for example, there are a few basic rules that
you ought to keep in mind.
Probably the most basic rule of all, in this regard,
is the one that says you should never –unless you
absolutely don’t care at all about eventual resale
value – improve a house to the point where its desired
sales price would be more than 20 percent higher than
the most expensive of the other houses in the immediate
neighborhood.
Try to raise the value of your house too high, that
is, and surrounding properties will pull it down.
Here are some other rules worth remembering:
Never rearrange the interior of your house in a way
that reduces the total number of bedrooms to less than
three.
Never add a third bathroom to a two-bath house unless
you don’t care about ever recouping your investment.
Swimming pools rarely return what you spend to
install them. Ditto for sun rooms and finished
basements.
If you decide to do what’s usually the smart thing
and move rather than improve, it’s often the smaller,
relatively inexpensive improvements that turn out to be
most worth doing.
The cost of replacing a discolored toilet bow, making
sure all the windows work or getting rid of dead trees
and shrubs in trivial compared with adding a bathroom,
but such things can have a big and very positive impact
on prospective buyers. A good broker can help you decide
which expenditures make sense and which don’t, and can
save you a lot of money in the process.
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