Business & Merchant

Last Updated on Friday, 27 February 2015 21:04

By Roger F. Dolanch, Broker/Owner

As a living space, a home's design and condition affects the lives of homeowners every day. From an investment viewpoint, it is wise to protect and enhance your property's market value. When looking at it from a different perspective, ask whether planned improvements would significantly add to the daily "quiet enjoyment" of the home. Then there is the additional concern of whether resale value after improvements makes financial sense. Here are some items to consider:

Occupancy Decisions to invest in expensive renovations or remodeling may be a little difficult to make. Ask yourself, how much more will you enjoy your home if you complete the project you are imagining? If you are planning to stay in the house ten years or more, consider how much it will add to your daily "quality of life." If you plan to live in the house less than ten years or if the project is quite extensive, weigh the impact on projected resale value.

Curb Appeal How good does the property look from the road? Always remain sensitive to future resale value. When it's time to consider selling, keep in mind there are thousands of houses that potential buyers can choose. If they don't have any interest at first glance when driving by, they have a tendency to pass up the opportunity to see inside. Things that make your home more attractive from a distance generally have a high rate of return. Landscaping, the front entrance, and the condition of the paint or siding are the biggest factors in curb appeal.

Deficiencies How does your home compare to nearby homes? If your house has one bath and all of the other houses in the neighborhood have three, adding a bath is likely to bring your property value closer to fair market value for the neighborhood. Lack of air conditioning, a roof with missing or curling shingles, or a wet basement can stick out like a sore thumb and perspective buyers tend to lower their offering prices by an amount greater than the actual cost of the remedy! Resale value is strongly linked to how many deficiencies you can correct before showing the house.

Distinctive Qualities Does the house have any "special somethings" that people talk about when describing the house to others? Homes generally sell better if they have a few desirable features such as a walk-in closet, hardwood floors, or a fireplace. Special features become very important in a competitive market where there are a lot of similar homes for sale.

Public Acceptance While special features are important, they become detrimental if other people don't value them. You may think a hot tub in the living room will give your home a terrifically distinctive character, but perspective buyers might not agree. Anything out of character with the neighborhood should be avoided. Limit your improvements to those for which there is well-evidenced demand. It's a good idea is to view a few model homes to verify that features you're considering are present in those homes.

Overkill No matter what you do, don't overdo it! Whether enhancing curb appeal, adding distinctiveness, or addressing deficiencies, you can usually expect a decent rate of return up to a certain point. After that point is reached, that rate of return drops off markedly. If your house is the only one on the street with only one bath, spending $4,000 to add a new bath might yield a return of $6,000 in terms of resale value. The same is true if you spend $15,000 on a bath. It may only yield the same $6,000. If the house already has a number of special features, each added one is likely to have a progressively smaller impact on resale value.

Repairs When it comes to basic home repairs and maintenance, your decision is relatively simple. Home repairs are best taken care of as soon as they are discovered! When problems are solved while still small, the home remains a safe and comfortable place in which to live.

For additional advice, call any of our CENTURY 21 Frontier professionals today!