Real Estate: Get The Most Out Of Your Investment
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“A lot of people live paycheck to paycheck, so it’s hard to say how much homeowners should set aside,” says appraiser Harlin Young. “We advise clients with income properties to set aside about 2 percent to 5 percent of their income, so they’re prepared for emergencies.”
Repair before you remodel. Only once your home is in tip-top shape should you consider improvements or renovations. Then, plan carefully. There’s no guarantee that you’ll get back the money you put into those projects. What are some of the best ways to hedge your bets?
Indisputably, KITCHEN AND BATH improvements are the best ways to increase the value of your home. “People want kitchens with newer, higher-end appliances (gas, rather than electric, stoves are preferable) and updated countertops and cabinetry,” says Realtor Margaret Murchie, a vice president of Coldwell Banker Pacific Properties. “There should be enough room for an eat-in area. Bathrooms are important, too. People spend a lot of time in their bathrooms, so they should be as roomy and comfortable as possible.”
Not so long ago, the three-bedroom, two-bathroom house was the norm. These days, more and more buyers expect no fewer than four bedrooms. The ADDITIONAL BEDROOM can be converted into an office, a den or a guest room. But “don’t even bother adding a bedroom unless you’re adding a bathroom attached to it,” advises Realtor Anne Oliver, also a vice president at Coldwell Banker. “These days, nobody wants to share a bathroom.”
Invest in a GREAT ROOM—that is, one large public room instead of smaller living or family rooms. “The days of the formal living room, separate from the rest of the house, are pretty much gone,” Oliver says. “People live a more relaxed lifestyle than we did years ago. People like a big room where they can relax, entertain.”
Incorporating the outdoors into your living space is one of the easiest ways to expand the living space in your home. ADDING A COVERED LANAI is an inexpensive, yet worthwhile investment in your home.
INSTALLING A POOL can increase the value of your home by up to $30,000, depending on the neighborhood. It’s important to install fencing around your property and gating around the pool to prevent your, as well as your neighbors’, children, from using the pool without adult supervision. A caveat: Because of such safety concerns, some couples with young children may avoid buying a home with a pool.
SMALER PROJECTS can boost your home’s value, as well, such as installing hardwood floors and replacing louvered windows with more modern ones.
One rule of thumb that applies to all renovation projects: Keep it simple. Ornate railings or funky-colored countertops can easily turn off prospective buyers, should you decide to sell your home.
If you plan to renovate your home, hoping to sell it at a higher price in the near future, Oliver suggests an almost all-or-nothing approach.
“If someone has a great piece of property and puts in a new kitchen, but the bathrooms are still dated, he’s not going to get the $70,000 back from the kitchen remodel,” Oliver explains. “Either you do a number of major renovations, or you do simple things to spruce up the house—new carpet, new paint, landscaping the yard—and let the buyer do the new kitchen and bathroom.”
It goes without saying: No matter what types of home improvements you take on, work with reputable, licensed contractors. If necessary, get the proper building permits for construction.
It’ll pay off in the long run.