This is my column for this week from the Arizona Republic (permanent link).
Doing the right kinds of repairs and remodeling to your home is the key to maintaining its resale value
Cleaning, painting and doing small repairs around the house are just about unlimited virtues for homeowners.
They’re a matter of necessity for people who hope to sell their homes. Only the best-prepared homes are selling at premium prices right now, with the rest going at or near the lender-owned price.
But even if you’re not selling, staying on top of the little things promotes your enjoyment of the home, and it helps to sustain its resale value. At a minimum, regular maintenance will help you catch small problems before the become big, expensive problems.
But if doing little jobs matters a lot, what about doing big jobs? Should you redo the kitchen and bathrooms while the market is low? Should you convert the carport into a garage and the patio into a family room? Should you add on a brand new master suite?
The definitive answer to all these questions is: Maybe.
Remember that the Phoenix real estate market may be down for years to come. It’s possible you won’t see a return on your investment for quite a while.
On the other hand, if you know you’re going to be in the home for the next five years, and if a new kitchen will substantially improve your enjoyment of the home, it might be worth doing.
Labor can be very cheap right now, and money is easy to obtain if you have equity in your home. But you have to resist the urge to over-improve for your neighborhood. Brazilian Blue Marble is gorgeous, but it probably won’t be worth more than Corian or Formica countertops on resale.
Serious additions are a bigger question. If you know you’re going to be in the home for five years, you’re probably okay. If the addition makes sense — if you live in a neighborhood of two bedroom homes, adding a master suite makes great sense — then go ahead.
Build with permits and follow the building codes, though. The worst thing you can do is spend money and time on supposed improvements that actually reduce the resale value of the home.
Technorati Tags: arizona, phoenix, phoenix real estate, real estate, real estate marketing
Jen in Ann Arbor says:
Good points. I’ve heard both 3-5 years and 5-8 years for major renovations. I’d err on the conservative side right now due to the economy and say go ahead if you’ll be there a *minimum* of 5 years.
January 11, 2009 — 4:01 pm
Michelle Minch, home stager says:
Hi Greg: I agree with all your points but would like to add that while improving a home may not result in a net gain on the sales price, an improved home will probably result in a faster sale vs. the same home unimproved. Of course the upgrades should be appropriate in price and scale for the neighborhood and house, but homes in better condition sell faster, all other variables being equal. Thanks.
January 11, 2009 — 4:31 pm
Todd Covington says:
Greg, it’s a great time to post this blog. Because home values have plummeted, it’s a great time to improve you home for a couple reasons. Of course, increasing the value of your home is great. What caught me eye was when you said an improvement would increase the enjoyment of the home. I/we have become so money driven I never thought about the enjoyment. Pretty sad that all I ever think about is the value. I will make it a to improve on that.
Yes, it will take years for the market to come back. In the mean time, owner’s can enjoy their improvements and still get more out of their home in a few years.
January 12, 2009 — 12:15 pm
Teri Lussier says:
A recent twitter conversation about multi-generations living together got me thinking about accessibility issues. Even though Dayton has an older population, I’ve not seen much retro fitting going on. I’d love to see homes built to accommodate different needs, but stylishly, without looking like an old folks home.
Phx is (in)famous for it’s aging population. Is retro fitting a popular and valuable improvement, or does it remind buyers of nursing homes.
January 16, 2009 — 6:43 pm