Fischer: Not all upgrades bring the gift of a return on resell
Welcome to your early Christmas present, readers: more unsolicited advice. Today’s admonition is brought to you by … a new puppy, which has inhibited my sleep and left me crankier than Scrooge on Christmas Eve.
Many new homeowners embark upon ownership with plans to eventually change and upgrade their recent purchase, especially with an existing home. Few homes exist that offer exactly what the buyer is looking for, with the exception of custom-built homes. However, many homes have the potential, with a few minor modifications and adjustments. Perhaps the home lacks a pantry, but the kitchen is large enough to add one. Maybe the bathroom features pink tile dotted with tiny flower baskets along a border that may need to be updated. Both of these are great projects that could certainly help with appeal and value when it comes to resale down the road. Some project ideas, however, will not.
I recently received a phone call from a client who had just closed on his first home. He called to ask my advice on expanding the garage by adding another bay. He is on the three- to five-year plan for resale on this home. I advised him that he would not see a great return on investment with this project. The cost of adding an additional bay, in comparison to what he would get back in resale, in a neighborhood that consists of very few homes with even one-car garages, would probably not be the best use of his resources for his short-term plan. Now if this were a home he was planning to occupy for several years and had a real need for an additional bay, my advice would have been different. I was relieved that he had called before contracting this out. It makes even my hardened heart sad to see disappointed homeowners when they find out that their improvements do not improve the value after all.
Some of the other “investments” I have seen over the years that I would have advised against if I had been asked, knowing the plan was eventual short-term resell, would include solar panels, swimming pools, extensive landscaping, upgraded utilities and, in some cases, new windows and roof.
Solar panels rarely add much value, if any at all. Please, for the love of Pete, do not believe the solar panel sales rep when they tell you it does. In fact, send them over to my house. I’ll invite him/her in and have a little bonding moment of enlightenment together. If you want solar panels and you plan to pay them off and live there for the 20-plus years it takes to have those panels pay for themselves, then you have my blessing (not that you were in search of such). However, just know it is not the best return on investment.
Swimming pools are fun, expensive to maintain, popular neighborhood assets that add little to no value and may end up as a liability. Again, if planning to stay in the home for a number of years, and this is an activity that can benefit you and/or your family, then do it. Just know that you will not be getting anywhere near the money you spent on the pool back in the form of resale value.
The miniature bridge that crosses the cascading waterfall landing in a decorative Koi pond, which was handcrafted by the same gifted hands that carved the swanky pergola in the backyard, are both enjoyable and charming. Unfortunately, they don’t really boost the bottom line.
Personally, I love a high-quality, super-efficient HVAC system just as much as the next person. In fact, I invested in one. I did so because my previous one sputtered and quit last year, and since this is my final resting place, and I’m still “relatively” young, I invested in what I want. For the record, I also have a stunning water feature, a hot tub and an extra garage bay, all of which I am well aware will not have much value. This was done for the purpose of our family enjoyment, not with eyes toward reselling.
The best investment to make would be a call to your professional, licensed and experienced Realtor before making any changes. That way, whether you decide to move forward or not, the decision will be made with clarity pertaining to value. Perhaps I should have requested professional advice pre-puppy adoption. Bah, humbug.
Jen Fischer is an associate broker and Realtor. She can be reached at 801-645-2134 or firstname.lastname@example.org.