Upgrading your home is essential especially if the aim is to improve the quality of life of its occupants. However, renovation projects that are undertaken for the purpose of increasing the property?s value is an entirely different matter. Indeed, some projects do improve the value of your property but others are just basically draining your wallet. How do you distinguish if a project adds more value to your home?
Initial thoughts:
You need to know first the appraised value of your house. Having this figure handy will provide you with a frame of reference to gauge the value of your planned upgrades. Be very careful, there is only a slight difference between improving your property and out-pricing it from competition.
To say it differently, you will be out-pricing your home in the event of a resale if you invest so much money for improving it that your house would eventually end up with a significantly higher value than the other houses in the neighborhood. You will not be able to ask the amount that your home is worth and expect it to sell if all the other homes are a much lower value.
How can I know if I am out-pricing my home?
The gurus in home marketing concur that the guideline is to never upgrade your home to more than twenty percent higher than rest of the homes in your selling radius. Listing your home for sale at a price that is twenty percent higher than your comparable competition is the absolute highest that you can go. The improvement that puts on the twenty percent needs to be significant.
To illustrate, you will be potentially losing $10,000 if you insist on carrying out an improvement project worth $40,000 despite the fact that you know that the 20% benchmark for your house?s value is only $30,000. value is On the flip side of things, doing an improvement that costs only $10,000 but makes the appeal and appraisal value of the home worth another $30,000 you have potentially just make yourself a nice little profit.
What are the other things to be considered?
You have to understand that some improvements may be too personal. For example, you may be very excited about the idea of putting in a hot tub, but would a potential buyer be as interested in it? Some expensive upgrades are merely personal preferences which sometimes doesn?t sit in well with the priorities of a would-be buyer hence you may only be facing the possibility of losing money over such improvement.
Safe upgrades:
There are several very practical home improvement upgrades that will appeal to everyone. Any remodeling to the kitchen or the bathroom or adding a needed new room that significantly improves the space of your home is pretty safe. Landscaping is quite possibly everyone?s favorite so it?s pretty safe. Landscaping indirectly improves the property?s value by creating a very favorable first impression.
Needed equipments like a new furnace or necessary items like an electrical system are not really improvements but fall under the category of ?must?. These are items that may have to be rectified on a new contract. If you have done improvements along the line of updating your fixtures,installing a hot water heater, a furnace, or having the roof repaired will always draw the serious buyers even though these may seem like not very visible at all. If you are considering new carpeting it needs to be very neutral so it will appeal to everyone.
Just remember that it is always to your benefit if you consider and weigh all angles first before implementing any renovation or improvement project.
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Source: http://www.messagematters.org/how-to-choose-home-improvement-projects-that-elevate-your-home-value/
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