There are so many new gadgets to buy and projects to complete. Some of these programs make statements like "you will get $2.00 back for every $1.00 invested in this kitchen or that bathroom renovation." Many clients ask me if these formulas are accurate. They want to know if they put money into renovations and upgrades, will their home value increase as a result. There is no easy answer to this question but I will share a couple of thoughts with you.
First, be very careful about accepting at face value any formula that promises a specific return on a particular project. These statements can be misleading. Each case needs to be examined carefully in context of the local real estate market to see whether or not it applies. With the recent downturn, I have seen decorating and home staging projects that did not result in any value increase. They did however result in the home selling when adjacent properties continued to sit on the market. Having a home staged properly to look its very best is an important selling strategy, but one that needs to be approached with great care.
Secondly there are two types of value. The first I call tangible – the value that results in a specific dollar return by way of increased home value. If you put $5,000 into a home project, you actually increase its market value by an amount pretty close to the $5,000 investment. The second is intangible – the joy that comes from living in a home that has design features that make living pleasurable. In other words, you enjoy your new carpet, paint or kitchen so much you really are not concerned whether or not you will recoup your dollars invested in the upgrades. Only you can decide which is most important to you.
Buying a home is an exciting time in one's life. Making the smart move of choosing a realtor is your first step to ensuring that your new home and community meets your needs.
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