Thursday, July 22, 2010

Raise Your Home Value

Compliments on your remodeling efforts are always a welcome payoff, but nothing beats seeing your home value rise as a result of your hard work.

It can be tricky to determine which home improvement projects are worth the sweat and which aren't. To gain the most from your improvements, select projects that do more with what you already have.

Projects that add value:

  • Kitchen and bath updates
  • Replacement of exterior siding
  • Fresh interior paint
  • Rejuvenation of landscaping

Less-profitable projects share one of three flaws: they cost too much, they involve a space that isn’t used every day or they reflect too much of your personal taste.

Projects that won't raise your home's value include:

  • Turning a spare bedroom into a home office
  • Conversion of a garage into a family room
  • Screening an outdoor room
  • Adding a deluxe kitchen upgrade into anything but an upscale home

    Take a look at the sweat scale and see how some of the most popular home improvements rate:

    The Sweat Scale

    $ - You’ll break a sweat trying to break even at resale.
    $$ - Probably not worth the sweat you’ll put into it.
    $$$ - Sweat the cost or style details to make money on this project.
    $$$$ - A good bet for turning the sweat of your brow into sweat equity.
    $$$$$ - You’ll be making money before the sweat dries.

    Kitchen Update
    Doing a kitchen update instead of a kitchen remodel is like getting Botox® instead of a face-lift – it’s cheaper, it’s faster and it can hold you over for years. Got a kitchen so outdated that Martha Washington would be comfortable cooking there? Go for the full-blown remodel.

    "If you have to overhaul the plumbing and wiring or you have galley kitchen that can be transformed into an open kitchen, go ahead and completely re-do," says Realtor Maggie Sanders, an agent with Coldwell Banker Residential Real Estate, Inc., Naples, Florida.

    For the biggest returns, focus on simple, inexpensive modern touches: recessed lighting, updated pulls, new plumbing fixtures, a solid surface countertop and tile or resilient flooring.

    Bathroom Update
    If you want to build real sweat equity, forget the bidet and the hand-blown sink when you remodel your existing bathroom (unless you live next door to Paris Hilton). Keep the plumbing where it is and focus on updating outdated fixtures. Strip the bath to the studs and put in a porcelain-on-steel tub with a tile surround, a tile floor, a durable solid-surface vanity, updated lighting, fresh plumbing fixtures and a new toilet.

    "If you have a small bathroom, do a shower only and no tub," says Real Estate Broker Mark Riley of Mark P. Riley Luxury Real Estate Group, Sarasota, Fla. "Slate colored tile will add allure, luster and an expensive look to a bathroom. It looks great with brushed nickel fixtures.

    Replacing siding
    Give your house a new outfit by replacing the siding and you’ll reap the rewards at resale. According to the National Association of Home Builders’ Cost vs. Value, replacing 1,250 sq. ft. of vinyl siding and trim returns 95.5 percent of cost – and that’s the cost when a contractor does it for you. Upscale siding made from either fiber-cement boards or cellular polyvinyl chloride (PVC) lumber has an even more astounding 103.6 percent return.

    Subtract the cost of the contractor from the profit equation and you could actually make money installing your own siding before you sell your home.

    Interior Paint
    Painting can be a great investment in your home or a horrible mistake. It all depends on the color you choose. Pick right and you earn a big payoff. Pick wrong and you devalue your home.

    Don’t think you can escape the issue by painting the walls white. "Too often, homeowners think it’s best to paint the house all the same color, but there is no pizzazz with white walls," says Realtor Lynn Anderson of ZipRealty, East Bay, California. "Soft, muted colors such as pale green or muted beige with white baseboards can still be neutral while greatly improving the look and feel of each room."

    Rejuvenate Landscaping
    Your house never gets a second chance to make a first impression. Shabby shrubbery and a patchy lawn make people assume the inside of your house looks as bad as the outside.

    "Keep improvements on par with the other homes in your neighborhood," says Pam O’Connor president of RELO/Leading Real Estate companies of the World. One RELO client in Atlanta transformed his large backyard into a soccer field. "When he sold the house, the owner didn’t recoup his investment because the new owners didn’t care for his choice of landscaping," she says.

    Stick to the basics. Trim or replace overgrown shrubs, plant colorful flowers to highlight your home’s best feature and install a new front door, garage door and mailbox, if necessary.

    Screened Room
    Turning a deck, porch or carport into a sunroom or screened patio creates a great space for entertaining, but it won’t add equity to your home. In fact, you can’t even count that additional square footage as part of the house unless it’s insulated, heated and cooled for year-round use, points out Realtor Nancy Jones, an agent with Hunt Real Estate ERA, Williamsville, NY.

    "A nice sunroom addition on a great house in a highly saleable

1 comment:

  1. This is a very comprehensive list. Thank you Joey! Even though this is more of a single family improvement list, some of the commercial real estate players could take a lesson from your playbook. You can use some of the same strategies to add value to Los Angeles multifamily and commercial assets, even tough most people don't think about investment properties along the same lines. The focus is generally more locating "distressed" assets, i.e. the needle in the haystack, whereas there is often value to be added where no distress is present.