Wednesday 8 April, 2020

Five home improvement that may not pay off come time to resell

Be careful how you go about home improvement.

Be careful how you go about home improvement.

You spent the holidays binging on HGTV, and now visions of shiplap accent walls and freestanding soaking tubs are dancing through your head.

Don’t let your desire to upgrade your home downgrade your home’s market value. Read that again.

Before you make a renovation fantasy a reality, consider whether the project will pay off when you’re ready to sell.

Plenty of home improvements add value, but others — like these five — can hurt it.

In no particular order, here goes…

1 A chef-quality kitchen

If you love to cook, a high-end kitchen could be the ultimate gift for you. But, if you think a massive overhaul will majorly impact resale value, you might be in for a surprise.

An upscale kitchen renovation recoups just 54% of its cost in added value, according to Remodeling magazine’s 2020 Cost vs Value report.

“If you do marble countertops and high-end appliances, you could spend US$100,000, and it doesn’t necessarily mean your house is worth an extra $100k,” says Opendoor consumer trends expert Beatrice de Jong.

On the flip side, smaller kitchen upgrades could yield a bigger payoff.

Chris Arienti, broker and owner of Remax Executive Realty near Boston, suggests keeping updates reasonable: Think granite rather than marble, and GE instead of Sub-Zero.

2 DIY painting

A bold statement wall can say the wrong thing to potential buyers if the workmanship is questionable.

Streaky, chipped or low-quality paint can knock a significant chunk off a home’s sale price, according to Opendoor data that looked at home offers made from June 2018 to June 2019.

“A good paint job is not easy,” says Sarah Cunningham, a real estate agent with Ethos Design + Remodel in Boise, Idaho.

“It is all in the prep work, and most people don’t want to do the prep work.”

Hiring a professional to paint can help ensure a more attractive result.

3 An expanded master suite

Knocking down a wall to create an oversized master bedroom, or stealing closet space to build out a spa-style bathroom may sound dreamy.

But how about as a selling point?

“If you go from five bedrooms to four, and you can make it work, no big deal,” Arienti says.

But, he cautions that losing a bedroom in a smaller house could mean a lower selling price.

As for cutting into closet space, residential building codes don’t mandate that bedrooms have closets.

But, Arienti says, “Once you take the closet out of a bedroom, to a buyer that no longer looks like a bedroom.”

4 Plush wall-to-wall carpeting

Carpets can be especially unattractive to first-time home buyers, who may be used to landlords updating carpet between renters, de Jong says.

“In general, people are grossed out by (carpeting). It can make a room look a little bit dated.”

It can also ding your sale price.

Carpet as the primary flooring in a house drops the value by US$3,900 — and carpeting in the master bedroom causes a US$3,800 plunge, according to Opendoor.

Conversely, a 2019 report from the National Association of Realtors estimated that sellers could recoup the entire cost of refinishing hardwood floors.

New wood flooring could actually add value, with sellers getting US$1.06 for every dollar spent according to NAR.

5 A swimming pool

It doesn’t matter if it’s infinity edge or above-ground: Any pool can be seen as a drawback by buyers who don’t want to deal with maintenance or insurance.

Even in Florida, a pool doesn’t add value, Keyes Company real estate agent Liede DeValdivielso said via email.

If you’re thinking resale, it’s not worth it — you’ll never recoup the cost, DeValdivielso said.

But, if you’ll use it and enjoy it, put in a pool.

How to decide if a renovation is worth the cost?

These are your steps to ensure you’re making an informed decision.

Consider your timeline. “If you’re going to be in the home for 30 years, you can do anything, because at that point, your mortgage is paid off,” Arienti says.

Looking to sell in the near future? Pay closer attention to whether your choices will appeal to a potential buyer.

Consult an expert! “Talk to a professional so you aren’t making misinformed choices that are going to work against you in five to 10 years,” Cunningham says.

A designer can help you tell fleeting trends from future classics, a contractor can explain what kind of work a proposed renovation would entail.

Compare home features in your area. De Jong suggests looking at comparable homes for sale near you and going to open houses to make sure your improvements align with the norms for your neighbourhood.

Get an appraisal. A licensed appraiser can do a feasibility study to estimate your home’s current value and its likely value after the improvements.

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