The real cost and value of home improvements has two primary considerations:
- the tangible dollar value that is added to your home compared to costs
- the intangible value of your enjoyment of the improvement
Most homeowners focus primarily on the costs, and whether they are adding dollar for dollar value to their home for resale. Those are legitimate concerns. Let’s break them down…
The tangible costs of a project have many components to consider:
- The first advice to seek is from a Realtor you know and trust. Ask them for some free advice. You want to know what is the likely increase in value you can expect from a project based on what “comparables” are available. You also want their professional opinion about how the buyers in your market are likely to value the improvement. Lastly, you want recommendations about builders you should talk with.
- The next step is to talk with at least two builders/remodelers. Ask them to meet at your home. Describe what you are thinking about doing. Ask for suggests they have and for an estimate of what it is likely to cost. Also ask if they do design work, or do you need an architect?
- Here are some general considerations to think about:
- usefulness of the improvements to a future buyer will effect the value
- if the house is older consider replacing electric wiring and plumbing
- make sure everything is done professionally, even if done by the homeowner
- badly done home improvements can actually detract from the home’s value
- Lastly, be very careful about re-purposing a bedroom. It should be able to be re-converted back to a bedroom later. The number of bedrooms has a large impact on the value of a home.
The intangible value of your enjoyment is very important. Try to put a dollar amount on your enjoyment value. What benefits will you and your family gain? How long do you anticipate living in your home? What is your enjoyment worth to you in dollars?
Now you’re in a position to add to the tangible cost estimates you have. Add to the tangible costs the dollar value you place on your enjoyment of the benefits. Then compare that total improvement value to what your Realtor has estimated you can get back at resale. You’re now ready to make a decision whether or not to make the improvements.
Information courtesy of Tampa FL Realtor Linda Nowicke.