When doing renovations, people seldom consider long-term resale value. Most families just need a really wonderful place to live and they work to make their forever home. So although it’s joyful to create a dream house, those fantasies will need to be balanced with an understanding of whether or not those granite countertops or that second story are great investments in the long term.
What’s resale value?
We hear the notion of resale value quite often pertaining to property. The ideal is to purchase a property that’s a fantastic investment and also to have its worth appreciate. Fantastic maintenance and proper renovations help ensure that when it is time to market, the property has gained equity and you will earn money.
However, the sum of money you will make is dependent on market appreciation.
If you’ve purchased a property by a street or a different not-so-great place, you probably got it for a fantastic price. If this location’s value does not increase during the time you own it, you will likely have to sell it for a similarly excellent price, even if you’ve done plenty of work on it.
Many home owners invest in renovations which are not in keeping with the area. Because of this, they wind up selling for less than they spent, which is heartbreaking.
Before you renovate, look at what’s been selling about you – at what price for what quality?
And really, how particular are these $10-per-square-foot tiles anyway?
Focus your investment into one or two components per room. Make pricey items like granite countertops, a fancy backsplash, or a higher end faucet; function like display bits, much like a piece of art.
Smallest may be greatest when it comes to resale
In terms of adding another story to make more space for a growing family, it can be worthwhile in the long term to search for a larger home.
If you invest an additional $100,000 on a two-bedroom bungalow in a neighborhood filled with two-bedroom bungalows, you might never regain that full investment. What Attracts Rats? It might be a far better idea to take your equity and discover a bigger home in a neighborhood where your investment will hold and even increase in time.
When it comes to resale value, it is always preferable to have the smallest home in a place with mansions as opposed to a $600K house surrounded by $300K homes.
Naturally, creating a happy home should always be the first priority. Simply make wise decisions that will bring you joy and prosperity for many years to come.