BG Home Improvement: Increasing Resale Value

[Acturus]

My wife and I are renting a house that her parents own. They tried to sell it as everything in the housing market was tanking, but that didn't work so well. The situation we're in now works pretty well for all of us, and is likely to continue for the next year or two.

At the same time, the house is unfortunately worth less than what they owe on it.

With that in mind, between my wife wanting to pretty the place up, and me wanting me to sharpen my craftsmanship for when we eventually get a house of our own, we're discussing minor improvements in some of the rooms, like crown molding and better lighting fixtures or new cabinets.

What I'm wondering is, is there a way to figure out how much these types of improvements would affect the resale value of the house? I've always heard that doing things like this automatically increase the value of a house. Is it all completely subjective, or are there monetary markers for these types of improvements that I can use as a benchmark to measure against what I'd have to pay in order to complete the improvements?

'Preciate it.

[archibaldcrane]

If they're eventually going to be selling it for a loss (got any figures here? Are we talking a 200k loss or a 40k loss?) what's the point in fixing it up? If they're going to sell it "short", the bank is going to be eating shit on the loss, so there's no sense in protecting that loss as far as I can tell.

[SephYuyX]

Having completly remodeld three houses with my family, and selling two of them, I can safely say yes, everything you do will increase the value of a home. The first house my parents bought was 60k, when it went to market years later, it sold for 400k.


Things to focus on improving:
-Kitchen, Bathrooms, Master, and if the basement is unfinshed, finish it.
-Adding central air/heating if it's not there, and basic things like a good paint job, molding, carpeting, tiling, insulated windows, etc, can also make for large improvments.
-People are also starting to want bigger living/dinning rooms as well.

Also, people ALWAYS look over this - Just because the yard isnt part of the house, it doesnt mean it doesnt effect the price at all. A well done landscape, properly maintained trees will go miles. Also, since youre outside, make sure you fix and cracks on the foundation, the roof doesnt leak, you have proper water flow AWAY from the house, out door lighting, fencing, and other safety like features are also gold.


Im probably forgetting a lot, but multitasking atm.

[Takedown3]

good rule of thumb is that every dollar you put into the house could potentially be doubled by all the GOOD work you put into it. if you buy shitty materials and take shortcuts then you could actually be doing yourself a dis-service

[archibaldcrane]

good rule of thumb is that every dollar you put into the house could potentially be doubled by all the GOOD work you put into it. if you buy shitty materials and take shortcuts then you could actually be doing yourself a dis-service

I'm house-shopping right now, and sometimes look at "flipped" houses - it's infuriating when you see a perfectly fine bathroom or kitchen with a fucking shitty brand-new tile job where you know that eventually you will tear it all out and redo it if you end up buying it.

Don't be that guy.

[Dimmauk]

I've been remodeling my wife's childhood home for a couple years now. We just finished remodeling a bathroom with new tile, new paint, new vanity and sink, and a new toilet. I had to replace alot of wall to due to mold. It looks a ton better.

[Nyima]

My parents are currently selling their home, the real estate guy told them to not put very much into redoing the house because in this market almost nothing you do will get your money back, let alone make you anything.

[Baolin]

My parents are currently selling their home, the real estate guy told them to not put very much into redoing the house because in this market almost nothing you do will get your money back, let alone make you anything.

This. Just finished selling my old house and buying our new one. We were in the same situation where the house we were in was given to my wife by her grandparents and we thought it could use a good bit of work to increase value before selling. Our real estate agent said basically the same thing that in the current market, you aren't going to get the same return that you would have gotten 5 years ago on fixing it up. Not to say there aren't some cheap options you can still do to increase value at a low cost. Your best bet is to talk to your agent if you have one and get their opinion on what could be done for relatively cheap that would increase the value on it.

[Acturus]

If they're eventually going to be selling it for a loss (got any figures here? Are we talking a 200k loss or a 40k loss?) what's the point in fixing it up? If they're going to sell it "short", the bank is going to be eating shit on the loss, so there's no sense in protecting that loss as far as I can tell.

We're talking closer to 40K than 200K. And honestly, if we're discussing $1 in equating to about $2 out if the work is good, then I can see spending $20K over the next two years as a value to my in-laws, especially when coupled with two years' worth of their mortgage payments to help.

I'd like to work with the idea of these improvements helping to turn the house back from being upside down, and they're not so far upside down that it's impossible.

[Takedown3]

make sure u dont put so much into the place that your price is way more then the average for your neighborhood, that's something else to consider. i.e. if the value of your home after all of these renos is 350k and the average price in the hood is 220k you most likely will take even more of a loss.

[Dimmauk]

The only reason we are remodeling is so we can sell the house. The areas we have fixed were so bad that anything we do will be a plus.

[volcanicweather]

I definitely second the "if you're going to do something, make sure you do something right" mentality. I have an aunt who is an evil person and flips housing for "additional income" because she's bored (her husband is rich). She buys these old breaking down condos and townhomes built in the 70s and 80s for cheap and does basic cosmetic updates (i.e. flooring, counters, sinks) but leaves the old hot water heater, wiring, and anything else you can't see. She then targets younger buyers so they fall in love with the cosmetics and are too naive to understand everything else behind the scenes. So slightly off-topic, but buyer beware when you've see someone is selling a house they purchased just less than a year ago.

[Lucavi]

make sure u dont put so much into the place that your price is way more then the average for your neighborhood, that's something else to consider. i.e. if the value of your home after all of these renos is 350k and the average price in the hood is 220k you most likely will take even more of a loss.

This. Don't price yourself out of a profit by beautifying the one house on a shitty neighborhood. Have it look up to the standards of the neighborhood, yet clean and structurally sound.

[Jak]

Someone mentioned the yard/landscaping. While you CAN increase the value by doing some decent landscaping, make sure it's low maintenance landscaping. Not everyone wants to be out pruning, cutting, plucking, picking, watering and weeding a yard every day like me.

Also, I don't know about it helping resale value (but it can't hurt).. but look at things like electrical outlets and the covers. When I bought my house.. the people had broken outlets, broken dirty covers, etc. Some people look at small things like that. While it may not help with resale value, it certainly helps in making the place look nice. No one wants shitty looking outlets/covers.

[Acturus]

make sure u dont put so much into the place that your price is way more then the average for your neighborhood, that's something else to consider. i.e. if the value of your home after all of these renos is 350k and the average price in the hood is 220k you most likely will take even more of a loss.

That's already pretty challenging, as it is the largest house in the neighborhood, in total square footage.

However, I remember that part of the reason why the house didn't sell originally was because there were no "upgrades" compared to some of our neighbors' houses. That's the mentality I'm applying here. The house will already be challenging to sell, given that it's one of three in the total development that is its size, but it's the only one of the three that has any intention of being sold.

Regardless, it's something I'll want to discuss with my inlaws, and with their realtor, with a specific plan in mind. I really was more curious to see if there was a way to estimate value added.

[BardonGaruda]

Just remember that if you're planning to repaint, update bathrooms etc. to pick neutral colours for paint, tiles etc. Having your personal preference in colours can put people off buying. Also most people's imagination sucks so the neutral colour scheme apparently helps them to more easily visualize how it would look when they put their own stamp on the house.

Something else to consider is that if they are looking to sell in 1-2 years market conditions will probably be much improved by then. Probably not at boom levels but the average time from listing to sale will probably be a lot shorter than it is today. So while spending on improvements now for selling in a month or two might not make sense in a year or 2 it could add a lot of value.

But I would recommend that you avoid over improving the house. Most buyers like the property to a certain standard but they also like to see potential for where they can improve the home and add value. If you've topped out the improvements to the home this might put off potential buyers. Do the basics to make the house and yard presentable and leave the big projects to the next owner.