Archive for the ‘bankrate.com’ Category

Six Worst Home Fixes for the Money – A Reprint

The following is a reprint from Bankrate.com.  It reminds us that you should consider how far you should go when fixing up, remodeling your home.  Is the cost really recoupable? 

It’s the magic phrase uttered by almost anyone who’s ever considered the cost  of home remodeling: “We’ll get it back when we sell.”

Unless you keep those projects practical, though, you might just be kidding  yourself.

For example:

  • Steel front door: Good.
  • Master suite addition costing more than the average American home:  Bad.

Every year, Remodeling magazine looks at the hottest home upgrades and  renovations and calculates just how much owners get back with they sell.

Upkeep is more popular than upgrades these days, says Sal Alfano, editorial  director for Remodeling. These are the projects that often recoup the biggest  slice of expenses at resale. But prices and returns do vary regionally, he  says.

Ever wonder what brings the lowest return when you plant that “for sale”  sign? Think high-dollar, high-end and highly personalized add-ons that make you  drool. Like a totally tricked-out garage built from the ground up. Or a super  luxe master suite addition. Or the home office redo designed just for you.

Here are the six improvements that rank dead last nationally  when it comes to getting those renovation dollars back at resale.

Want to get an idea what today’s office-away-from-the-office looks like? Walk  into Starbucks.

These days, a home office consists of a multiple-choice combination of  wireless laptops, smartphones, PDAs and touch-screen tablets. And that worker  bee might be toiling anywhere from a home patio or a favorite restaurant to a  park bench.

The standard home office renovation, meanwhile — complete with plenty of  built-in storage and high-tech wiring — is this year’s biggest loser in the  resale value sweepstakes. Nationally, homeowners spent an average of $28,888 and  can expect to recoup about 45.8 percent at resale, according to the report.

Return on investment doesn’t reflect your enjoyment of the space, Alfano  says.

He offers two tips for home-office remodelers when they sell. First, opt for  something that can be easily converted back into a bedroom or den for (or by)  the next buyer.

Second, when you’re selling, call it a study, den or hobby  room. “There’s lots of call for multipurpose space. Don’t lock yourself into  that one use,” Alfano says. Don’t use words that invoke images of actual work.  Or the office.

You see a backup generator and imagine all of the comforts no matter what the  weather.

But potential buyers hailing from outside your local area may not share that  vision. (And a handful of those who do might have watched too many zombie  movies.)

On average, when homeowners have a heavy-duty backup power generator  installed, they spend about $14,718, according to the report. Going with a  slightly less expensive model or having a less complicated installation could  cut the costs significantly, Alfano says.

Average amount of the price recovered at resale time: 48.5  percent.

Real estate agents will tell you that potential buyers want square footage,  pristine condition and lots of light. So a brand-new room that has the word  “sun” in it, it has to be great for resale value, right?

Not necessarily.

Your first clue: The word “addition” — which means expanding the footprint  of your home — indicates that this is not a renovation for the faint of heart  (or wallet). “It’s one of the more expensive projects,” Alfano says.

While it seems simple enough, the national average for a sunroom addition is  $75,224, according to the report. Homeowners can expect to recoup about 48.6  percent when they sell.

That doesn’t mean that adding a sunroom is always a bad move.

If your home needs another common area, a sunroom could be the  answer, says Katie Severance, co-author of “The Complete Idiot’s Guide to  Selling Your Home.” An addition is best considered in the context of the whole  home, she says. “The doctor has to treat the whole patient. You have to look at  the house and say ‘What’s out of balance?'”

Who doesn’t want to wake up in a five-star-hotel-quality suite with an  attached spa bathroom and a kitchenette that affords you coffee and pastries  before facing the world?

Once you see the price tag, it won’t just be the coffee keeping you up at  night.

For a super-deluxe master suite addition — which adds square footage and  uses only top-dollar materials — the average cost is about $232,062, according  to the report.

That’s 460 nights at a posh resort with enough left over to raid the  minibar.

In years past, this project was “sort of a trend in vacation homes” that  migrated to primary dwellings, Alfano says. Sellers can expect to recover about  52.7 percent at resale.

Your buyer can purchase a newer house with the same features as part of the  original floor plan that “probably lays out better anyway,” says Loren Keim,  author of “How to Sell Your Home in Any Market.”

So while the next buyer may appreciate your luxury  accommodations (which could even tip their decision in your home’s favor),  chances are they won’t want to pay the full tab for your remodel

Unless you’re a hermit who never entertains, you’ve probably wished for an  extra bathroom now and then.

But bathroom additions require serious coin. For a moderately outfitted  addition with synthetic stone or plastic laminate surfaces, figure parting with  about $21,695, according to the Remodeling report. Go upscale, with finishes  like premium marble or fine tile, and you can easily spend in the neighborhood  of $40,710.

Either way, you get about the same return: 53 cents on the dollar. “In the  buyer’s mind, the additional bathroom isn’t worth that additional $20,000 to  $40,000,” Keim says.

Investigate a less-expensive way to get the same result without  flushing quite as much cash. While additions usually cost more, pros might be  able to reconfigure your existing space to add a bathroom for less, Alfano  says.

Instead of cleaning out the garage, how much would you pay to have a new one  built from scratch?

This time, it would have all the organizational built-ins, and a durable,  easy-to-clean floor to ensure it would never be messy again. And windows for  natural light.

Oh yeah, and you could store a couple of cars in there, too.

The price tag for a top-of-the-line detached two-car with all the trimmings  is about $90,053, according to the report. You can expect to recover about 53.6  percent of that when you sell.

“This one is completely decked out on the inside,” says Alfano. “It’s a dream  garage.”

And that’s likely some of the problem with recovering the value  at resale. Says Keim, “You’ve got a very small target audience out there that  wants an upscale garage.”

Remember that resale is what the new buyer is willing to pay.  Bottom line is that while they may like these items, do they find them important enough to pay extra for them. 

%d bloggers like this: