Adding Value to Your Home
There are plenty of remodels that can make your house more attractive to future buyers – and appraisers! But not all of them are no-brainers financially.
Feel free to discard articles that tell you that a new kitchen will, guaranteed, increase your value – or really any article that tells you there are guarantees. The only and best answer to the should-I-or-shouldn’t-I question depends on what you have right now.
Rule #1: Eliminate your house’s deficits
If you have only one bath, it will not necessarily pay you to remodel your already reasonably-equipped kitchen. The first step in any remodel is to eliminate the deficits. A one-bath needs a second bath, a 2-bedroom needs a 3rd bedroom. A 500 square foot house needs…well, it needs more square footage!!
Only when the lacks cannot be filled – either because there’s no room to expand or not enough cash to expand with – should you consider other projects, but each one should be aimed addressing the livability issues stemming from the deficits. Look for projects in a very small house that maximize storage and eliminate tight spaces before you put out money on granite or hardwoods.
Your best ally in this process is your memory: When you bought the house, what were the items you considered drawbacks? It’s amazing how we forget our first impressions once we’ve become acclimated to a house. Was it the too-shallow, tiny kitchen sink? The wall that separated – unnecessarily – kitchen and dining room? A master bedroom that opens to the laundry room? These are your first targets in adding value.
Rule #2 Balance financial output with expected gain
Most houses have their limitations. Value will always be subject to those limitations. A 1500-square-foot home on a suburban lot in, say, Newberg, can only be worth so much. Think of it as a buyer would. You have $500,000 to buy a home. You see a 1500-square-foot home on a small city lot with marble floors, a replica of the Sistine Chapel on the dining room ceiling, and a lap-pool in the garage. Wow, right?! It’s priced at $500,000. But for $500,000, there is also a 2500 square-foot home on a large lot with a golf course view. I suppose if you’re an avid swimmer, the former would tick your boxes but most buyers are going to go for square footage – every time! If the house is small, consider tasteful updated materials and commonly wished-for features like A/C rather than top-of-the-line materials or obscure items.
On the other hand, a 2500-square-foot house on a larger lot benefits from quality materials and is sometimes penalized by the lack of them. Buyers with money to spend know when you’ve “cheaped out.”
Once you’ve arrived at 3000+ square feet on a large lot in an upscale neighborhood, it may be time to do that lap pool!!
Rule #3 Catch a Clue from the Market
Look at what new construction is offering on similarly sized homes and copy it. Builders often know what buyers are looking for – it’s their business to know – so use them as a reference point. If houses similar in square footage and lot size are being offered with certain standard features, consider these in your remodel. Your older home will still not meet the same value as a brand new one, but chances are, your new features will significantly increase buyer interest and appraiser approval.