Sam writes about home improvement
Today, Sam Schneiderman, Broker-owner of Greater Boston Home Team shares his thoughts about home improvements and how much value they really add to a property.
Strategic home improvements, planned and well executed, can add value to a home or condo. Many home improvement salespeople would have you believe that you’re likely to get back the cost of the improvements. That may or may not be true. Based on my experience as an appraiser and broker, I think that the return on the improvement at resale really depends on a combination of factors and the market when the property is sold.
There are “improvements” that enhance an individual owner’s lifestyle. Homeowners that build a first-class climate controlled wine cellar in their basement (that can cost over five figures) are unlikely to recoup their cost. A swimming pool is another example of an improvement that adds liitle value and can even create resale challenges in New England.
There are home improvements that are required to upgrade a property. These days most buyers prefer hardwood floors over wall-to-wall carpeting. Pink, gold and green bathroom tiles don't have much market appeal these days no matter how pristine the condition of the tiles. Energy-efficient windows and heating systems are big pluses that enhance the marketability of a property but are unlikely to recoup their full cost.
There are also improvements that can correct a property’s deficiencies. Correcting an awkward floor plan, adding interior or exterior access to a basement or a direct entry into the house from a garage are a few examples. In some markets, at some price points, adding central air conditioning or a master bathroom could correct a perceived deficiency.
Some so-called improvements aren't really improvements at all. For instance, exterior paint. While painting is usually maintenance, siding the same home might be considered an upgrade in some markets.
In a rapidly appreciating market it's easy to recoup the cost of most upgrades and deficiency corrections. In a market that is not appreciating it's harder for sellers to recoup as much of the cost of improvements especially at the lower end of the market, however, correcting deficiencies almost always has the highest payback.
Each year remodeling magazine publishes their own cost versus value report. This year, their survey indicates that most improvements will recoup less than they did last year.
On the other hand, it seems that people may be staying in their homes longer again and the personal satisfaction of having their home the way they want it might outweigh the issue of recouping the cost.
PERSPECTIVE
The amount that an improvement adds is highly dependent on the property’s overall condition before and after the improvement, the price point of the home in its market and the average buyer’s expectations in that market.
If resale is important, consult with an experienced appraiser in your market to determine the marketability and resale potential of the improvement.
What home-improvements are must haves and which are not?
Which so-called improvements actually de-value a property?
