Consider resale value before renovating

When doing renovations, people rarely think about long-term resale value. Most families just want a really nice place to live and work to create their forever home. However, life can be unpredictable. So while building your dream home is a joy, those dreams need to be balanced with understanding whether or not those granite countertops or that second floor are good long-term investments.

What is resale value?

We hear the idea of ​​resale value quite often in relation to real estate. The ideal is to buy a property that is a good investment and that its value appreciates. Good maintenance and proper renovations help ensure that when it’s time to sell again, the property has gained value and you make money.

However, the amount of money you will earn depends on the appreciation of the market. That’s why it’s important to make improvements that fit the property and the neighborhood.

Location the key factor to consider

If you bought a property along a freeway or in another not-so-good location, you probably got it for a good price. If the value of that location doesn’t increase during the time you own it, you’ll probably have to sell it for an equally good price, even if you’ve put a lot of work into it.

Many property owners invest in renovations that are not in keeping with the neighborhood. As a result, they end up selling for less than they put in, which can be heartbreaking.

Before renovating, take a look at what has been selling around you: at what cost and with what quality? If the most expensive house in your neighborhood sold for $400,000 after being completely renovated, there is no point in giving your house a higher style.

And really, how special are those $10 per square foot tiles anyway? Go with the $5 chips instead.

Focus your investment on one or two items per room. Make expensive items like granite countertops, a fancy backsplash, or a high-end faucet; they function as exhibition pieces, similar to a work of art.

Smaller can be better when it comes to resale
As for adding a second story to create more space for an expanding family, it may be worth looking for a larger home in the long run.

If you invest an extra $100,000 in a two-bedroom bungalow in a neighborhood full of two-bedroom bungalows, you may never get that full investment back. It may be a much better idea to take your equity and find a larger home in a neighborhood where your investment will hold up and even grow over time.

When it comes to resale value, it’s always better to have the smallest house in an area with mansions rather than a $600K house surrounded by $300K houses.

Of course, creating a cheerful home should always be the first priority. Just make wise decisions that will bring you prosperity and happiness for years to come.