When working with clients, I often get asked for advice about making improvements to the home and how much bang for the buck the changes will deliver down the road when the house is eventually up for sale.
You may be familiar with the annual Cost vs. Value report, but that is not always very helpful and practical when making specific plans for your own home. Here are some of my thoughts on the topic.
Make sure that utility is preserved. If you are going to be living in the home for some time before it comes on the market, make sure the improvements are such that you will enjoy using them as part of your home. Also, keep in mind that certain rooms need certain basic features. A bedroom is really only a bedroom if it has legal height, a window with egress and a usable closet.
Anywhere you can add basic utility is a good thing. Maybe the laundry is an awkward location. Creating a more usable laundry space in a more convenient location would add a lot of utility.
Make sure to do the work to code with permits. If a buyer down the road has to worry about code violations or permit issues, then the value will not be as strong. This will add to the cost of the project, but will help maintain the value down the road and makes it easier to sell.
There is a difference between improvements and upgrades. Improvements bring a room or feature that is in disrepair up to a livable standard. For instance, maybe you have an old kitchen with out of date décor and appliances that are on their last legs. New basic appliances and some simple redecorating can go a long way to improve the room and value. An upgrade would be installing top-of-the-line stainless steel appliances and granite slab countertops. You may not see as much of a return on the upgrade than on simple improvements, especially if the upgrades are incongruent with the condition of the rest of the home.
Always remember that there is no way to truly predict the economy and home prices in the future, so that is always part of the risk no matter what the house or the project is. That is why I urge people to make changes and improvements that they enjoy and will use and find value in. That way if you aren’t able to recoup every penny of the costs, at least you got utility from them.