Remodeling cost and value
The day after Thanksgiving I start hanging our outside Christmas lights. Exterior illumination technology has improved since the 1960’s but bulb replacement is still a frustration. Something mysterious happens to strings of light bulbs while resting peacefully in the garage all year. Between the time I take the working lights down after New Years and getting them out of their box again in November, a number of the bulbs and strands of lights decide not to participate in this year’s annual event. Every light manufacture has similar but slightly different bulbs. Since my collection of lights date back a few years, I am forced to buy another new strings of lights, which of course don’t match up with my previous collection.
Besides obsolete Christmas lights, there are a number of things around our house that could use some upgrading. Our new 50-inch TV will not fit into our 40-inch entertainment center. Our Formica bathroom counter tops are discolored and no longer fashionable. Our kitchen could use some tile work, our old heating and air conditioning systems are not as efficient as the newer models and we have a few windows with defective seals. Even with the money and time to tackle remodeling projects that will upgrade our outdated features, knowing which will add the greatest value upon resale is critical.
Remodeling Magazine, in participation with the National Association of Realtors, recently completed their 2007 “Remodeling Cost vs. Value Report.” The report provides valuable information to anyone considering a home remodeling project. The study reviews specs and costs on 29 upscale and midrange remodeling projects in 60 different markets. It then estimates the percentage of increased dollars returned upon resale. One of the markets sampled was the Sacramento Region, which includes El Dorado County. Market segmentation is important since desirable features in the foothills may not be the same for Southern Cal.
Generally, I am opposed to major remodeling projects when planning on selling a home within 18 months. Deferred maintenance and improved cosmetics are necessary but few sampled remodeling projects returned 100 percent or more of their costs upon resale. Major remodeling should be primarily for the benefit of the existing homeowners with reasonable consideration for a future homeowner. Over improving a home for its location will cost a seller major dollars while some modest expenditures will return big rewards.
According to the study, three of the four remodeling projects that returned the highest amount of money upon resale were on the exterior. First impressions of a home are apparently valuable. Exterior finishes make a conspicuous statement about a homes style and quality. More home shoppers are deciding which properties to view with an agent by previewing them first on the Internet. Many buyers will further narrow their search by first driving by the homes of interest. You may not be able to judge a book by its cover but exteriorly attractive homes are getting more showings and offers.
Since Californians spend a lot of time outdoors, it’s not surprising that wood decks ranked high as a “make sense” exterior improvement returning 98 percent of their cost. Decks and patios increase the living space of a home and smooth out a home’s sharp angles. In Northern California, decks should be constructed of treated and composite wood like substances and covered decks are preferable. Natural wood decks are a liability. They require yearly maintenance and are subject to wood eating bugs and dry rot.
Exterior siding and window replacement ranked pretty high on the suggested to do list. T-111 plywood siding and single pane windows are a turn-off for homebuyers. Landscaping wasn’t included in the survey but a modest investment in landscaping (less than $25,000) will pay for itself. Extravagant landscaping with exotic trees, shrubs and rock outcroppings is spectacular to view but buyers will rarely pay for the seller’s costs.
One of the best remodeling projects, returning 88 percent of the money invested, was a garage addition. Everyone can use a larger garage for which buyers will pay extra. In the country, barns will return a bonus. If a property could be considered horse property but doesn’t have any horse facilities, building, a small barn, stable and installing cross fencing will attract additional interest and a higher price from horse property buyers.
A minor kitchen remodel will have a better return than a major one. Before extending walls and plumbing, consider some cosmetic changes. New kitchen cabinets doors are less expensive than replacing the entire cabinet, granite tile is less expensive than slab counters and a new stainless steel sink and designer faucet will pay for itself upon resale.
Before considering a remodeling project, it’s best to get an opinion from your neighborhood professional Realtor. Since every home and neighborhood is different, every remodeling project will need to be considered within its unique environment. The cost recouped on any project will depend upon the overall condition of the rest of the home, similar properties and the general condition of the market. A good agent will know what’s the latest hot buttons for buyers. The complete “Remodeling Cost vs. Value Report” can be found at www.costvsvalue.com
Home technology and buyer’s preferences continue to change. In today’s real estate climate, smart remodeling may be preferable to the expense and inconvenience of selling and buying another home. All homes during their lifetime will require some remodeling upgrades. Knowing which ones are worth the effort and investment makes good sense.
Besides obsolete Christmas lights, there are a number of things around our house that could use some upgrading. Our new 50-inch TV will not fit into our 40-inch entertainment center. Our Formica bathroom counter tops are discolored and no longer fashionable. Our kitchen could use some tile work, our old heating and air conditioning systems are not as efficient as the newer models and we have a few windows with defective seals. Even with the money and time to tackle remodeling projects that will upgrade our outdated features, knowing which will add the greatest value upon resale is critical.
Remodeling Magazine, in participation with the National Association of Realtors, recently completed their 2007 “Remodeling Cost vs. Value Report.” The report provides valuable information to anyone considering a home remodeling project. The study reviews specs and costs on 29 upscale and midrange remodeling projects in 60 different markets. It then estimates the percentage of increased dollars returned upon resale. One of the markets sampled was the Sacramento Region, which includes El Dorado County. Market segmentation is important since desirable features in the foothills may not be the same for Southern Cal.
Generally, I am opposed to major remodeling projects when planning on selling a home within 18 months. Deferred maintenance and improved cosmetics are necessary but few sampled remodeling projects returned 100 percent or more of their costs upon resale. Major remodeling should be primarily for the benefit of the existing homeowners with reasonable consideration for a future homeowner. Over improving a home for its location will cost a seller major dollars while some modest expenditures will return big rewards.
According to the study, three of the four remodeling projects that returned the highest amount of money upon resale were on the exterior. First impressions of a home are apparently valuable. Exterior finishes make a conspicuous statement about a homes style and quality. More home shoppers are deciding which properties to view with an agent by previewing them first on the Internet. Many buyers will further narrow their search by first driving by the homes of interest. You may not be able to judge a book by its cover but exteriorly attractive homes are getting more showings and offers.
Since Californians spend a lot of time outdoors, it’s not surprising that wood decks ranked high as a “make sense” exterior improvement returning 98 percent of their cost. Decks and patios increase the living space of a home and smooth out a home’s sharp angles. In Northern California, decks should be constructed of treated and composite wood like substances and covered decks are preferable. Natural wood decks are a liability. They require yearly maintenance and are subject to wood eating bugs and dry rot.
Exterior siding and window replacement ranked pretty high on the suggested to do list. T-111 plywood siding and single pane windows are a turn-off for homebuyers. Landscaping wasn’t included in the survey but a modest investment in landscaping (less than $25,000) will pay for itself. Extravagant landscaping with exotic trees, shrubs and rock outcroppings is spectacular to view but buyers will rarely pay for the seller’s costs.
One of the best remodeling projects, returning 88 percent of the money invested, was a garage addition. Everyone can use a larger garage for which buyers will pay extra. In the country, barns will return a bonus. If a property could be considered horse property but doesn’t have any horse facilities, building, a small barn, stable and installing cross fencing will attract additional interest and a higher price from horse property buyers.
A minor kitchen remodel will have a better return than a major one. Before extending walls and plumbing, consider some cosmetic changes. New kitchen cabinets doors are less expensive than replacing the entire cabinet, granite tile is less expensive than slab counters and a new stainless steel sink and designer faucet will pay for itself upon resale.
Before considering a remodeling project, it’s best to get an opinion from your neighborhood professional Realtor. Since every home and neighborhood is different, every remodeling project will need to be considered within its unique environment. The cost recouped on any project will depend upon the overall condition of the rest of the home, similar properties and the general condition of the market. A good agent will know what’s the latest hot buttons for buyers. The complete “Remodeling Cost vs. Value Report” can be found at www.costvsvalue.com
Home technology and buyer’s preferences continue to change. In today’s real estate climate, smart remodeling may be preferable to the expense and inconvenience of selling and buying another home. All homes during their lifetime will require some remodeling upgrades. Knowing which ones are worth the effort and investment makes good sense.
posted by Ken Calhoon at 4:24 PM
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