If you're a homeowner planning to move in a couple of years...

In My Humble Opinion
1

Do you make pricy (to us) renovations to your house or not?

We bought our current house as a starter home two years ago. As of now, the plan is to move to a larger house in another couple of years (and we’re hoping to make the next move the LAST move), but we’re faced with what to do with our current home. There are some changes we’d really like to make, but we’re not sure if, in the long run, it will be worth it to us to spend the money.

For the record, the real estate business is slow, but steady here - houses do eventually sell, although it does take some awhile. Our next door neighbor’s house has been up for sale for almost a year - but it was overpriced for a lot of that year, and hasn’t had as many updates as our house. However, we live in an 80 year old house, so it’s not like people are clamoring for houses like ours. The perks of the house, however, and part of why we bought it are:

2 1/2 bathrooms (in houses in the same price range around here, you usually get 1 bathroom unless someone’s added a 1/2 bath on the first floor. Our second full bathroom is in the basement.)

Jacuzzi tub and ceramic flooring in the upstairs bathroom

Partially-finished basement

Large mud room and extra room (office) on back of house - these were additions, along with the 1/2 bath, about 25 years ago.

So what we’d really like to do, but aren’t sure if we should spend the money:

New kitchen, mud room, and 1/2 bath floor (they all share the same flooring)

New kitchen countertops

Re-carpet the finished part of the basement

Hardwood floor in the dining room and master bedroom

Will any of these actually add value to our house and help us sell, or will we just be spending the money in vain? We will probably do the floor no matter what, as the current kitchen floor is awful and really needs to be updated (plus, with my seven month old crawling around, I’d really like a decent floor that I can tell I’m getting clean when I mop), but as for the rest of it, it’s what we’d LIKE to do.

E.

2

Well, they say you make back things you do to your kitchen, and I’d guess that updating that floor would be money well spent for you - it’s something you really want and it would help your house sell. The countertops, probably yes also, if you can afford it.

3

Here in Victoria, BC, you could probably sell an 80 year old single car garage with no insulation and one lightbulb on a string. Location and market dictate a lot. From my vast experience*, however, improvements to a house are always a good idea, and add far more to the selling price and desirability of a property. We’re always being told that buyers want to be able to move in and enjoy it right away, not have to plan on doing their own renovations.

  • of watching Sell This House, Flip That House, The House Doctor, Flip This House, Real Renos…
4

I have the same vast experience as Savannah, and all of those renovations (save for the basement carpet - unless it really sucks then yes) are the ones that are always recommended on TV.

5

Your best bet is to consult a local realtor and find out what they believe adds value to a house locally. Things differ around the country.

Disclaimer made: Everyone I have ever talked to say the kitchen is the area to make improvements in. The kitchen is a very big selling point. Find out what kind of flooring is popular in your area. Near me, 5 years ago, Ceramic tile was a very big feature. Stainless Steel Ovens, Dishwashers and Refrigerators were big.

These things always change, so again ask a local Realtor you trust. They are usually more than willing to give you a free assessment and critique also if you are interested.

Jim

6

Generally, it’s kitchens, bathrooms and garages that will earn you the best returns.

7

My thoroughly uninformed vote: Replace the kitchen floor immediately with something that will look good when you are ready to sell. You’ll enjoy it, and it will probably add enough appeal to your kitchen to bump the value/desirability of your house.
The rest? I like the talk to a realtor suggestion. Check out prices of your desired flooring replacements, and think about how much enjoyment you would need to get to make it worth replacing.

My guess is, replacing floors is mostly going to fall into that space where people won’t delibrately pay an extra $5k for the house that has all new floors, (and I don’t have a clue whether $5k is enough to pay for the flooring replacements you are interested in), but it might make them think better of the house, make the house more desirable. Unless you have really quirky taste in flooring, I can’t think it would hurt your ability to sell the house.

If I were you, I probably wouldn’t replace all your floors that you are intersted in replacing, but I might replace some of them–kitchen first choice, masterbedroom/dining room second choice. I’d probably skip the finished basement, unless the benefit to you of the new carpet is really high.

8

This is also true in South Florida. However, our housing market has slowed in a lot of portions of this area; anything above $200-300k is having trouble selling, but people are buying in the range below them.

Improving your kitchen to a moderate extent will add to the value and attractiveness of the house. Like Savannah and others in this thread, I’ve learned quite a bit from those “renovate and sell” shows. One of the things I’ve seen is that, although renovations are great, there is a point where renovations that are too expensive don’t contribute anything to the value of the house and will lessen your potential profits when selling the house.

9

My stepmom was a Realtor[sup]TM[/sup] for years and she always warned me not to have the most expensive or the least expensive house on the block. Always go for middle. Since the extra bathrooms and (I’m assuming) Jacuzzi and additions already make your house more expensive than most on the block, don’t throw more money in that will ultimately make your house unsellable. If you’re already appraising at $8,000 above the average, no sense throwing another $10,000 into the place - you’re unlikely to get $18,000 above local average even for a nice house. People want nice, but if they have that kind of cash, they want a middle house in a nicer neighborhood.

So, yes, ask your local real estate agent. She’ll know local values better than you do, and you can make informed decisions once you know.

10

We plan to sell our house in the next couple of years, and each year we have taken on a “big” project. Our deciding factor for choosing the project and justifying the expense is: will it provide us with more enjoyment and comfort in our home?

3 years ago we redid our one & only bathroom. We also leveled and laid new turf in our front and back yards.

2 years ago we redid our kitchen.

Last year we built a retaining wall and put up a new fence along the side of our yard.

We do our best to stick to a reasonable budget, and we are definitely not going to “over-improve” - our neighbourhood is full of starter homes and rentals; there is only so much we will ever be able to sell our place for, and we are well aware of that.

11

I am considering selling fairly imminently and will be getting professional advice. Basically, if it will improve the value of the house by more than the cost, I’ll probably do it.

12

There are different levels of renovations; if you’re re-doing things to sell, maybe you get the cheapest flooring or countertops. If you’re re-doing for yourself, you get what YOU want. My husband and I are in almost the same position, Elsa - we bought a fixer-upper 3 1/2 years ago, with a five-year reno plan and the intention of making money on the sale and moving into a nicer house. We have steadily been making improvements as we live here - painting, fixing holes in walls, re-doing the yard, etc. We are also trying to do as much ourselves as we can, and pay only for the materials.

When you go to sell, you want your house to show pretty. If you do nothing else, do the renos that make your house look pretty. People get foolish when they look at houses; they forget about things like plumbing, electrical, roofs, foundations, etc. and just want the house that looks pretty.

13

Bingo! Unless your kitchen is seriously outdated, leave it alone. You’d do best by making sure everything that’s already there works properly and looks good. Fix that sticking window, that squeaky floor board, the noise in the plumbing, etc. Maybe do some modest improvement to the landscaping. It’s highly unlikely that you’ll recoup the cost of a kit. or bthrm remodel, unless they are in very poor condition.

14

When we moved into our first owned home this past summer, we completely redid the walls and carpets before we even brought things into the house. This with the knowledge (hope?) that this house will just be a stepping stone that we have for five years or so. Similarly, we’re about to replace the stove and fridge in the kitchen, both of which are probably original (our cluster of townhouses were built in 1984).

Of course that means we will get five years of enjoyment out of our own color scheme and carpets before we move to sell. And, unfortunately, there’s always the possibility that we’ll have to repaint the walls to something more neutral in order to sell anyway. So it could all be somewhat moot.

I guess my point: Don’t rule out improving things for yourself to enjoy for the next year or two before you sell, especially if your tastes are basic enough to be something a potential buyer would like too (and a nice new fridge instead of a 15 year old clunker, or an upgraded water heater, is anybody’s taste).

15

I agree with most of the other posters. Although you didn’t say what price range you are considering for each of those improvements. Are you talking granite counter tops? Real hardwood floors, or laminate? Those make a world of difference in recouping your investment.

Counter tops are a good example. Say you want to put in granite counter tops. Conservatively let’s say that granite would cost you about $7K to purchase and install (guessing here) and Formica would cost $2k to purchase and install. Now while you may love the new countertops when someone comes to buy the place, if they don’t like the granite they’ll be unwilling to pay $5K more for the house to get them…even if they are new. Formica is cheap to change out if you get tired of it, or want to update the look of a kitchen. More expensive materials obviously cost more to replace, so people are less willing to redo them. That’s a bit rambling, but do you get the idea?

If it was me, I’d redo the kitchen, mudroom, and 1/2 bath floors. Sounds like they’re all connected, so it will probably be cost effective depending on what type of flooring you’re going to choose. Then I’d carpet and finish the basement, as that will add more total living space to your house. Thereby increasing your square footage…which should let you sell your house for me. I would not do the hardwood floors unless the existing floors look really bad, and if I did, I’d go with an inexpensive laminate. It still looks really nice and for the one or two years you’re planning on staying in the house they should hold up fine.

Best of Luck!

16

I used to have a site linked for such estimates. In general you will not make money on renovation projects. Some rooms you will incur less of a loss doing, such as kitchens renovations typically add 85% of their cost to the value of the house. When redoing a bedroom you could only add 40% of the cost. This is assuming you are paying market prices for labor and materials. If you are capable of doing a project yourself or have source of cheaper materials it is more likely you can actually profit on a renovation.

The person to consult for establishing if a project will add value to your house or not is your Realtor.

You mention adding hardwood floors and that the house is 80 years old. What is the flooring now? I’d expect your house to have already had wood floors, they might still be there only buried under whatever butchery past owners may have done.

17

I vote kitchens and bathrooms too. Everything I’ve ever read says that they increase value, and I imagine very few people will pay top dollar for a grungy old kitchen or bathroom. Don’t turn it into a $30,000 gourmet special kitchen; it’s amazing how a few changes can make a huge difference.

18

I’m not familiar with how other areas work but in my area basements do not count towards living space regardless of what you do to them. So for increasing the value of the house they are a crap shoot. Finishing a basement is only something you do if you plan on staying and want the space.

19

Here is the 2006 Cost vs. Value report from Remodling Online (using data obtained from surveys of homeowners & realtors). In general, remodling project do not add more than their cost to the value of a home. The results have been skewed for the past few years because home prices have been rising at unprecedented rates and the increase in house values have often been incorrectly attributed to the remodeling work.

In the middle of 2006, most housing markets peaked and many homeowners are finding themselves stuck in houses that would sell for less than they paid for them. This is happening not just in large markets like California and Florida but also in smaller markets thought to be bubble proof such as Iowa, Wisconsin, and Pennsylvania. The number of forecloses is skyrocketing as many marginal borrowers who took out adjustable rate, interest only loans are finding themselves unable to make payments and ineligible for refinancing. The rate of foreclosures is only going to climb and many mortgage lending companies are tightening their lending standards which means more houses on the market and fewer people to buy them. (Here’s an mainstream media article about the problem)

The point is that we’re not going to see annual double digit housing price appreciation anymore and many markets may see some depreciation. Take this into account when planning your renovations. Do the affordable renovations which will make the house more comfortable for you without banking on them actually adding to the houses value.

20

Huh, I didn’t know that…thanks!