What Projects Improve the Value Of Your Home?
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When you own a home, every dollar you spend fixing it up can be judged against the value of your home, which will matter to you when you decide to sell. Are there ways to spend money on a home that will actually decrease the value of that home? Absolutely. Are there ways to spend that raise the value of the home? Certainly, there are – you just have to focus on the right additions. Let’s try to analyze the difference and list a few equity additions and a few equity subtractions.
Let’s try this in list form and see if a pattern emerges. Let’s start with a hot item in the housing market: Solar panels.
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San Diego Solar Installation experts warn that a solar installation could actually detract from the equity value of a home if the system is not properly installed. So, before we add this to the automatic plus list, remember that caveat. Have solar panels put on correctly or be prepared for trouble.
That said, solar panels are a guaranteed equity booster for your home when placed in a non-disruptive location, such as a roof or in a yard that has enough space for the size of the dwelling. In other words, if you crowd a solar installation onto a small yard and take away the possibility that kids could throw a football or a Frisbee in the yard, you might be cutting down your equity slightly.
A tried and true real estate rule says that you pay for the home and not for the land. The land is a bonus. However, if you are trying to sell a home in a residential, family-oriented neighborhood, you could be risking turning some customers away if your solar panel takes up the entire yard. That requires cutting the grass, but yields no place to play.
On the plus side, you have a house that generates its own electricity. That’s a great value booster.
A New Roof, Fixing the Foundation, & A New Septic System
These are certainly big ticket items that should add that much more value to your home. But the selling price doesn’t even budge when you put on a new roof or build a new septic system, both of which should last 20 years or more. A repaired foundation could last 40 years or more, but the same thing occurs. The price doesn’t move. And here’s why.
People buying a home simply expect a roof that doesn’t leak, a septic system that works and a foundation that is sound. So, when you puff up your chest and brag, “Hey, I just spent $30,000 on a new foundation,” for example, the next buyer thinks, “Ho-hum. That’s not very exciting or even interesting. We expected that, anyway.”
You can only lose on these items. If you don’t put in a new septic or fix that roof or foundation, the next buyer will come at you with a lower offer, based on estimates to get those jobs done. But if you do that ahead of time, it is relatively thankless. You can raise the price of the home and take your chances. At least the new buyer has fewer excuses for offering less.
Painting the House – Inside and Out
Here’s an odd dichotomy. If the house really needs a coat of paint – the old paint curling up and flaking off – then paint the outside and you will get your money’s worth.
Similarly, paint the inside if it desperately and obviously needs it. Then the value of your home should go up. Unless you over-pay to have the work done, you should get your money’s worth.
But this is a place to make careful decisions, especially if you face a hot real estate market. Let’s say you choose a very subtle, sophisticated roseate color for the living room – for example. The first potential buyer walks in and turns up their nose at it. “Nah,” they say, “I want off white.”
In other words, you cannot account for taste. Anyone can be critical of your taste and when money comes into it, you can be sure they will be.
Photo courtesy of: jtpatriot