A home is often the biggest asset in the family portfolio. It is also a huge expense, what with the mortgage, and the upkeep, and the insurance. How do you know the home will appreciate in value, and what can you do to maximize its value?
The best thing to maintain your home’s value is to simply maintain your home. Keep it painted, free of infestations, in good repair, with updated electrical and plumbing systems. Even in a hot real estate market, you will always be at an advantage selling a home in good repair than one that has obvious problems. Siding, windows, roof, walkways – all are expenses in maintaining a home that can pay you back at selling time if done properly and in keeping with the rest of the neighborhood.
People often wonder if they should add on a room, expand, put in a pool, upgrade the kitchen, put in new bathrooms, etc. Sure, if that is what you want! Be careful about spending over your head for improvements that will not pay you back in enjoyment as well as value.
For example, kitchens are often a huge selling point for a home. If a buyer has a choice between two identical houses, and one kitchen has updated appliances, layout, and high quality counter tops and cabinets, and the other has not been significantly upgraded since 1975, guess which house the buyer will choose, even if it costs more? The more modern one usually is the choice. However, if the kitchen was “over-improved” for the neighborhood, you may find that buyers for this particular property are not inclined to pay top dollar for your upgrade.
Most people are looking for more than one bathroom when they buy a home. Even a half a bath can make a home more attractive to buyers, if it is in a convenient location in the house. If your home is an older home in an area where many people have expanded or built new homes, putting in the extra bath, and doing it with quality materials will certainly pay you back.
Most people these days prefer at least a two car garage. It is not a problem if you have just a one car garage or carport that cannot be expanded, but be aware that for many buyers, garages are not just space for junk – they want to keep at least one car there, and having the garage organized and clean speaks well of the property.
Speaking of garages, one renovation I always hate to see is a garage that has been enclosed as a family room or extra bedroom. Losing the garage means that you lose some buyers. Also, buyers realize that many of these renovations were done to save money on the cost of actually adding a room, so the extra room you have “added” is not much of a selling point. In terms of value, you are better off actually adding a room. The cost may hurt more, but you have added value to your home without taking anything away.
What about pools? If you are in an area where pools are common, and you want one for your own lifestyle, by all means, go ahead and enjoy yourself. Well constructed and maintained in-ground pools are more likely to be considered an asset than above ground pools. If you are in an area where pools are unusual, put one in for yourself – again, high quality, and well maintained. Be prepared to find that some buyers will not want a house with a pool in some areas.
Finishing your basement or attic can add value to your home. Again, be sure that the work is of high quality. I have encountered some basement renovations that were do it yourself jobs which had been done without necessary permits. A do it yourself basement or attic renovation will not result in a higher sale price like one that has been well planned and professionally finished. And no matter how nice the renovation, if the basement takes on water, your buyer will wonder why you spent all that money for an upgrade and did not take care of the structural issues with a pump or French drains.
Home buyers are looking for their best deal. For many, a well maintained home in absolute move in condition at a fair price in a good location is the best deal they will find anywhere!