Be careful not to over improve your home

Written by Posted On Wednesday, 05 July 2017 17:38

Making home improvements to your Long Island house is important. It improves the livability of your home and helps improve the value of your home.  That being said, you often do not get a full 100% return on that investment.  And, many people don't realize that.

 

Why is that?

 

Well there are many reasons.  One of them is that not every buyer perceives the value to be as high as you do (in other words, they may be willing to pay more for the feature, but not as much as you would.  Another reason is that people have different tastes.  For example, if you are renovating a kitchen, I'm sure you have your taste preferences on color/type of cabinets.  Same with the color of the countertops.  And, the floor, etc.  But, the buyer may share those same preferences, hence they value it less than you do.  The 3rd factor is depreciation. Yes, the kitchen gets used and depreciates, just like a car...or a computer.  And, of course styles change over time...and eventually, it becomes time to remodel your kitchen.

 

So remember this...you almost never get 100% return on your investment.

 

The next important consideration is that you need to look at home improvements in the context of your neighborhood.  If your home is already the most expensive in the neighborhood, there is only so much that a buyer will pay for that house...compared to the other houses.  But, if your house is a lower than average value, you may get a higher return on investment.  Look at what's expected in your area and what others value.  So, for example, if you are living in low end co-op or condo, buyers will only pay so much to live in that area. If all of the places are carpeted and you upgrade to hardwood floors, a potential buyer for that area may not be able to afford paying that much more vs their other options.

 

And, of course there are some home improvements that have a very low ROI (e.g. adding a swimming pool in a cold climate, or adding a lot of landscaping).  In addition to not recouping your investment, a new potential buyer is faced with very expensive maintenance costs that they either may not be able to afford, or don't want to spend on an annual basis.

 

When you're contemplating making improvements to your home, and you want to understand the impact to the resale value, you should consult a local realtor.  They can help you understand the market value for your home and the project. They can also tell you what new buyers are looking for.

Rate this item
(0 votes)
Debbie Gartner, The Flooring Girl

I'm known as The Flooring Girl, and I used to own my own Flooring store in Westchester County, NY.  I blog about hardwood flooring, sanding, carpet, other flooring options and home decor.

 

Please note that some of this site's links are affiliate links, and Debbie Gartner is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com. At NO ADDITIONAL COST TO YOU, I will earn a small commission, if you purchase them. Please note that these are products I know/use and recommend to my customers. I recommend them as they are good products.

theflooringgirl.com

Agent Resource

Limited time offer - 50% off - click here

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.