Whether your home is currently on the market, or you’re thinking about putting it up for sale soon, you may want to make some improvements. Improvements can be a good thing, but you have to balance any improvements you make with the potential that you’re going overboard. Over-improving is something a lot of homeowners do. They put so much into upgrades and renovations that they essentially have little equity left in their homes, and they reduce its general marketability.
You should keep in mind that when you sell a home, you’re never going to get a 100% return on anything you do. It might increase the property value, but you’re not going to see dollar-for-dollar returns, so you have to be strategic. Think about how you can make your home more marketable, but don’t go into any improvement or addition project thinking you’re going to get all of your money back.
A good rule of thumb is that if you’re making improvements for your own lifestyle and enjoyment, and you plan to stay in your home for many years, then go for it. If you’re planning to put your home on the market in the next few years, be cautious of any improvements and also realistic.
Consider the Location
If you improve your home, consider the location. If you improve your home to the point that it outprices the surrounding neighborhood, then you’re going to have a tough time selling it for a higher price. You want to keep the neighborhood and the general market in mind when you’re thinking about projects and upgrades. If your home is in a starter neighborhood and you add high-end finishes, you’re probably not going to make your money back. Location and comps are two of the biggest drivers of the value of a home.
Younger buyers, such as Millennial families, tend to value outdoor space. They turn it into a whole other living area, so if you’re considering the addition of a room to your home, consider how it will impact your outdoor space. Yes, additional square footage and something like an extra bedroom can be appealing to buyers, but not if it’s going to make your yard smaller than the homes around it.
Something else to think about, especially when it comes to adding bedrooms in particular, is the fact that more isn’t always better. People have fewer children and that makes having four, five and six bedrooms less important than it might have once been.
Finally, before you embark on a renovation project think about whether or not it’s going to make your home too personal. You have to think about possible buyers who won’t share your view of your upgrades. Nice countertops might be something fairly impersonal, but a pool, on the other hand, might seem like more work and maintenance for a new buyer. You may think adding a wine cellar is luxurious, but new buyers might not drink wine. You have to balance true upgrades that create value with your personal preferences if there’s even a chance you’ll put your home on the market in the near future.
If you’re ready to buy or sell, reach out to EffectiveAgents® today.