Article Written by: Llona Bray, JD
Renovating, remodeling, and
improving your Orlando area home can be great ways to give it a makeover, gain
extra space, or otherwise make it possible for you to stay in one place longer.
But will they increase your selling price? The day may come when you want or
need to sell. In preparation for that possibility, realize that not all home
improvements are created equal. Some will increase the value of your home, and
some will actually make selling more difficult. Here's how to tell the
Projects With the Highest
Certain projects add more resale
value than others. Here are some that generally have the best financial impact.
People like to see modern
conveniences and styles in the kitchen. Especially in older homes, kitchen improvements
tend to add value. Read the real estate ads sometime -- you're sure to notice
how many mention the updated kitchen
Second to kitchen remodels are bathroom
modernizing older styles or appliances usually results in good return.
Your house makes a first
impression quickly, so sprucing up its outdoor appearance is a smart
investment. This includes siding (fiber cement tends to cost the most, but has
the best return) and landscaping, particularly in the front yard.
Roofs and windows.
Roofs and windows are expensive
to replace, and buyers expect these to be in good condition. Unfortunately,
that means that while replacing them won't dramatically increase resale value,
not replacing them could significantly decrease it.
Projects That Can Negatively Affect Resale Value
Almost any project has the potential to
negatively affect resale value. A general rule is that the more personal your
choices are -- meaning they're made to suit your particular lifestyle or taste
-- the less likely they are to have a positive effect on resale value.
This doesn't mean you shouldn't do the
project. It just means you shouldn't expect it to add value to your home and
should anticipate that your home may be more difficult to sell as a result. For
example, while a soundproof music studio might be your dream come true, it
won't be practical for a young family looking for an extra bedroom for their
new baby. These types of buyers won't pay the premium it cost you to build the
studio and they may be turned off by it.
Here are some general indicators that a
project might have negative resale value.
Luxury upgrades. While no one wants to see the absolute cheapest
renovations in a home, the highest-quality upgrades often don't have the return
of mid-range ones, unless you're in a very high-end home. Marble floors in the
bathroom or custom cabinets in the kitchen may be nice, but you shouldn't
assume buyers will pay proportionately for these luxuries.
Rooms that don't fit with the floor plan. Converting the back patio to a family room may be a
perfect way to add more space to your home but, if your dining room window now
looks into the family room, it probably won't be well loved by buyers.
Garage conversions. Garage conversions can give homeowners much needed
space, but buyers like having garages, so converting this space usually won't
A swimming pool.
A pool may seem like the ultimate luxury to you --
but when it comes to selling it could be more of a hindrance than a help. It
may be seen as a safety hazard by parents with small children. Consider also
whether it's usable most of the year -- while a pool may be a real selling
point in parts of Florida and California, it could be a serious liability in
Minnesota or Wisconsin.
Other Factors That Affect Resale Value
Even if you do the right kind of projects,
you're not guaranteed a high return on your investment. Before deciding whether
an improvement will add value, consider some more general factors.
Your changes should conform to the
neighborhood. If you live in a
neighborhood of two-bedroom bungalows and you add a second story to put in a
couple extra bedrooms, you aren't likely to see a high return. Buyers looking
for homes that large won't be looking in your neighborhood. On the other hand,
if many of your neighbors are making similar improvements (perhaps because
these affordable homes are on large lots and in a great school district), you
might fare well doing the same.
Upgrades to a newer home probably won't
have the same impact that they would in an older home.
In a 1950s home, an original kitchen will likely make
buyers think: "I guess we'll start with a kitchen
" The same isn't
necessarily true of a house that's just a few years old, which means you're
less likely to increase a newer home's value significantly by remodeling.
Your upgrades should be in sync with the
rest of the house. Focusing narrowly
on only one room -- the perfect master suite, for example -- can be a mistake.
If the rest of your house was last updated 30 years ago, it will look even
shabbier in comparison to the upgraded suite.
Stay within the price range for similar homes. From a practical perspective, you shouldn't expect to
recover as much from improvements to a modestly priced home as you would for
improvements to a high-end home. Spending $30,000 remodeling a kitchen with
top-of-the-line appliances in a home that costs $150,000 won't have nearly the
return the same remodel would in a $500,000 home.
Be Realistic About the Value of Home Improvements
The real estate market always has its share
of "flippers" -- real estate investors with varying levels of
expertise who buy properties and fix them up, only to turn around and sell them
for a profit a short while later. However, before you get dollar signs in your
eyes, realize that it's mostly the pros who can make a living at this. They've
got contractors on staff and a fine-tuned idea about how to get the highest
return for the lowest project costs.