In the right market conditions, a project might
fit into both categories. Other times, though, the
two approaches will conflict:
Just Want To
Do It — In situation A, the project is
perceived as a necessary or worthwhile improvement
to your family's lifestyle. Say you have two or
three teenagers in the family and the morning
bathroom situation is completely out of control. It
doesn't matter if an additional bath generates a 150
percent return on investment or actually decreases
the value of the home (unlikely, unless you're a
completely incompetent do-it-yourselfer with a
bizarre design sense). The economic impact just
doesn't matter. If you have the money for a new bath
and you don't want to move — you add the bath. It's
that simple.
Or say you're a barbecue fiend and the only
feature missing from the dream home you've just
purchased is a sprawling backyard patio with a
natural-gas grill custom-built with flagstone and
river rock. Again, return on investment just isn't
going to be a critical question. The improvement
becomes more comparable to purchasing a depreciating
asset that you feel is a necessity for your
lifestyle — such as an automobile. When the barbecue
aficionado adds a deluxe patio to a home that's
already the most expensive property in the
neighborhood — perhaps destroying the entire
backyard in the process — there's a good chance that
very little of the cost will be recouped in a
subsequent sale.
An even better example might be a pool. If you're
a person who simply has to have one — fine. Put in a
pool. But it's probably worth checking with a real
estate professional first, just to make sure you
fully understand that adding the pool might actually
lessen the property's value and make it more
difficult to sell should you later decide to move.
That's the reality in many markets. That doesn't
necessarily mean you shouldn't do it, especially if
you're planning to live in the home for the rest of
your life. It just means it's worth knowing the cost
and salability impacts at the front end — even if
they're not going to deter you from pursuing the
project.
Really
Need To Do It — The "type-B" home
improvement project is pursued primarily to increase
the property's salability. In turn, this often
increases your return on investment. A good real
estate agent can advise you of possible improvements
that will attract more potential buyers and also pay
for themselves either through increasing the home's
value or through shortening the time it takes to
sell the home.
Here we're typically talking about projects such as:
painting — either because the existing paint is in
bad shape or is an unusual color; replacing carpets
— again because of age, color or style; repairing or
resurfacing a cracked driveway or sidewalk; refacing
kitchen cabinets; and trimming or removing overgrown
or unattractive landscaping.
While spending several thousand dollars on your
home right before you sell it might not sound very
appealing, it's not uncommon for the right work to
more than pay for itself in a higher selling price
and shorter marketing time.
Consult with an experienced real estate agent to
learn what improvements will make your home more
marketable in comparison to similar properties that
are now — or recently have been — on the market in
your area.
