If you want to make some changes on your home but not sell in today's market, consider some renovations which will add to the value of your property and make you more comfortable. While you should look at every expenditure with a cautious eye for recouping the cost, you can't put off everything you need or want for your lifestyle hoping that great market of a few years ago will come back soon.
According to a study from Remodeling magazine, the average return on value for an upgrade declined from 87% in 2005 to 64% in 2009. But here are some rules to help you maximize a return on your remodeling investment.
1. Do needed repairs. Don't "defer" maintenance. Repairs are almost always more expensive if you put them off. Buyers might not need a jacuzzi but they certainly will take off their price for leaky faucets or faulty wiring. If buyers discover them during inspection, it's now common practice to ask sellers not only to pick up the tab for the repair but also to pay a penalty to compensate the buyer for the inconvenience of having work done.
2. Remodeling to use space more efficiently is cheaper than adding on. Tacking on a large addition you may want might just make the house too big for the neighborhood or most buyers. The trend now is toward great rooms, so the space can be divided as the homeowner wants or needs as the years go by. Rather than adding on, you're better off repurposing existing square footage by reconfiguring the floor plan. A lot of interior walls in our Hawaii Kai homes are known as "single wall" and relatively easy to tear down for a more open feel.
3. Think Green. If you need to replace appliances, buy Energy Star. A little extra now will pay you back in energy savings and tax credits. And most buyers will want all the energy-saving features they can find.
4. Don't chase technology. You might love a home theater, but you can bet the technology will change in the next few years and your expensive set up could be obsolete. With buyers seeking any excuse to low-ball their offers, they're not going to reward you for an out-of-date system. Gadgets are different than infrastructure though. Add ethernet ports when you can, plenty of outlets, and cabling throughout.
5. Don't be the first on the block or in the neighborhood (I'm not speaking of our high-end communities) to have a fancy upgrade. You want the best house, not the most expensive one on your block when you sell. “You really have to keep your house's amenities in line with the neighborhood now” says Kermit Baker, director of the remodeling futures program at Harvard University's Joint Center for Housing Studies. If granite countertops are in-style, and they appeal to you, then make the investment. Make sure you will enjoy them too, not just hope they will make the house worth a higher price. Also, be sure and think neutral in colors and fixtures for the widest buyer appeal.
6. The longer you plan to stay in your home, the less you need to consider the risk of spending for remodeling. But if you think you will want to move or will outgrow the property in 3-5 years, except for repairs, don't do a big renovation.
Home improvements are a bargain right now, with contractors bidding 10%, 20%, even 40% lower for the same work than just a year or two ago, says Bernie Markstein, senior economist for the National Association of Home Builders. You just need to do some thinking about your lifestyle and timing before you commit.
If you want information on Hawaii Kai real estate trends, and what has been selling in Hawaii Kai, just call or email. I've been a Realtor here for more than 20 years, and can guide you with any community or condo complex in Hawaii Kai.
Barbara Abe, Realtor