Most homeowners have a desire to fix up and improve their property with the primary purpose to make it a more comfortable place to live. Homeowners need to be careful with how they choose to spend their money on home improvement projects if they are expecting the investment to pay off. The following six items commonly lead people to think they are adding home value, but these items really don’t.
1. Overbuilding for your Neighborhood
Attempting to increase the value of a home, home owners make improvements to their property that ultimately cause their home fall outside of the norm for the neighborhood or tract. Homeowners should be aware of the size and the amenities of the homes in the surrounding track. Improving a home significantly over the size of the average homes in the neighborhood will not pay back on a one-to-one investment. Remember, that when a buyer makes an offer on your property and they will be obtaining financing and the buyer’s lender will send out an appraiser to find a value. The more unique your home is, the harder it will be for the appraiser to do their job. Homebuyers will not pay $800,000 for a house in a tract with an average sales price of $600,000. As great as all the extra improvements are, buyers will be reluctant to set a new high for the neighborhood.
New flooring is typically always a good thing to have when selling your home. However exotic flooring may not work with prospective buyer’s decorating tastes. Flooring is expensive and if you’ve picked specially patterns or colors, not only is that money down the drain, but also will cost you on the sale price of your home as buyers will want to replace all the flooring and they will calculate that cost before writing their offer.
California’s in a prolonged drought. Some estimates believe we could experience drought for another decade or two. Overly lush and water thirsty landscaping may cause buyers to have concern as to the monthly costs of watering and maintaining overly lush landscaping. Eliminating landscaping in favor or hardscape is very expensive an will never return dollar for dollar investment.
Buyers are looking for upgraded kitchens, bathrooms and windows. Typically high-end appliances for a kitchen can add up really quick, but will never bring a one-for-one return when you go to sell your property. Upgraded homes tend to sell quicker than their non-upgraded counterparts, however they don’t cause large upward swings and pricing.
5. Swimming Pools
Swimming pools are a toss of a coin in that as many buyers who desire a pool, there are an equal amount of buyers who do not want a swimming pool. The pool construction business in Southern California has become very expensive. A very basic in ground pool can run $65,000 or more. It’s not uncommon to see appraisers adjusted value on a property only $10,000 for the addition of swimming pool.
6. Invisible Improvements
Copper plumbing, heating/air-conditioning systems, and tankless water heaters; these are all excellent upgrades and will help your house sell faster over competing properties in the same market. Typically these items will not drive the price of your property up as buyers expect these core operating systems of the home to be in proper working order. Homes with older systems tend to get discounted for future replacement concerns. Again these are items that will help your home sell quicker at full market or near full market value.
The Bottom Line
Any improvement you make on your property, do it for yourself and for the enjoyment of your family. If improving your home helps improve the care and comfort of your own family, that pays dividends that will far exceed any dollars you hope to recoup when you go to sell your property. Properties that are tastefully upgraded and improved, that do not eclipse the neighborhood, will sell quickly and for full market value. The trick to all of this is find the balance of what you want and matching it to where you live.