Article - Most home renovations don't pay off

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http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
sure.
Well, I have, as in mostly "This is going to hurt the resale value, but so f'ing what?" (-:
-- Bobby G.
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http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
Our last kitchen remodel cost us $40k. Didn't add anything to the dropping resale value, but made it a better cash cow Las Vegas vacation rental. We had intended to retire there, then found Utah. Our current rancho remodeling will cost about $10k due to a LOT of tradeouts and cost cutting things where we splurged on the last one. We don't give a whit about resale. The remodel just totally opens up the inside of the house, adds to the view, and makes us like it more.
Steve
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But, Jim, that goes against the article. ;-)
Steve
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Only true if you define value as what you get after resale the home. You put in a new kitchen mostly because you are tired of looking at the old kitchen, not to turn a big profit.
Jimmie
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On 11/14/2010 5:16 PM, JIMMIE wrote:

Dollar value at resale isn't the only criteria- it is being able to sell it at all. As it sits right now, maybe a single guy might buy my place, but a woman is gonna want to keep looking. (It sat empty for 6? months before I bought it, and Mrs. previous owner made her husband accept my low-ball offer.) And since the place has 3 bedrooms, the odds of a single guy buying it are pretty slim. So, at some point, I'm gonna have to throw enough money to at least make it presentable. Nothing fancy, just presentable.
--
aem sends....

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http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
What do you know. All that writing, and they finally put the important stuff in the last paragraph.
Go figger.
Steve
Heart surgery pending? Read up and prepare. Learn how to care for a friend. http://cabgbypasssurgery.com
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On 11/14/2010 5:33 PM, Steve B wrote:

Yeah, true. Not much new here. In today's housing market, if your house is not in perfect repair or needs serious upgrades, it will be very difficult to sell and DYI stuff like painting will reap rewards.
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http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
What I am seeing in my neighborhood is that the real cheap fixer uppers are the ones that have broken the logjam of unsold homes. Investors and out of work carpenters teaming up in one case.
-- Bobby G.
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wrote:

Dunno, the second to the last was good, too, but I especially like the $226K master suite. The second idiot was the second one who bought it for $125K.

Indeed.
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http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
Most of the regulars have already made very valid points. I will just add a cynical observation.
Who were these idiots kidding all along when they spent way more borrowed money than they had to do overpriced "improvements" in honor of the resale Goddess?
Make your home comfortable for yourself but I think you should always use a little common sense. A 50K kitchen remodel in a neighborhood of 50-60K homes is not using good common sense. It might be justifiable if you plan to live there until you die and love cooking but don't kid yourself it is money spent, not money invested. Do keep in mind I speaking of current value, not what you paid ages ago. I did a 12K kitchen remodel on my in-laws home many years ago (1987). We all laughed about it because they only paid 15K for the house in 1952 or 53. The new kitchen and appliance cost almost as much as the house.
They enjoyed it together for a few years and my FIL still enjoys it today.
If you spend money you have or will shortly have then do as you please. Borrowing the money can become a disaster.
Off the soapbox, throw money not rocks. :)
--
Colbyt
Please come visit http://www.househomerepair.com
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wrote:

I don't understand how they come up with these numbers. They are, I suspect, guesses and based more on anecdotal evidence than anything else.
Let me use my own house as an example. We just renovated our kitchen, family room and three bathrooms. Cost was 50 thousand. I'm a builder .. retail would have been something like 70 thousand.
Howwould they figure how much value we added. The value of a house is what it sells for -- willing seller, willing buyer and all that -- not what a bank or an appraiser or an assessor or some self appointed Yahoo! writer might think it is worth.
Therefore I cannot say what the house would have sold for prior to the renos, and I cannot say what the house will sell for after the renos because it is not for sale.
Since money has a time value, how do they assign a value to how quickly a house would sell -- since it wasn't for sale before and isn't for sale after?
To me, this is just morecrap based on half assed research intended to sell magazines ... a friend used to own a bunch of newspapers; he always said content was important only to keep the ads separated. Same as HGTV's so-called content. And same as this nonsense.
Ken in Calgary
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They come up with them using facts, and not asking people whether or not they like their remodel and think it's worth it. To me, it sounds like someone whining about how you paid too much for your car, and it's not any good, and you were a fool to buy it, even though you love riding around in it, how it drives, and how you look to your envious neighbor. It's all numbers, and I don't see any statements from people who have remodeled. I like it, what's THEIR problem?

Similar experience, and doing a three room remodel right now, only using less money. Trading out a lot of stuff, but still doing it in granite, new tile, texture, knocking out walls, putting in headers to open up the space, new cabinets, and appliances.

You can find facts to support any conclusion. Sounds like the story was made up before they went out and got any figures.

And you, if like me, like them just the way they are. We have two in Las Vegas, and when we to there on business, we usually stay there unless rented out on vacation rental basis. See them at www.vrbo.com numbers 19554 and 113164. The second is the one with the major renovation, starting at the kitchen, which was $40k. I love going there on business. Feels like I'm at home. ;-) They were listed at the start of the downfall at $ 1 million for the two, and we didn't care if we sold them or not, as they are cash cows.
A lot of people don't care if they sell their houses, because they like them. A lot of people don't care if they only break even on a renovation because they get to enjoy it. It is only if you are trying to flip a house and make some money that you have to crunch the numbers, and in today's market unless you almost get the house for free, there's not a lot of wiggle room.

Again, it's someone who's obviously been to college and educated beyond their capacity prattling on about their impression of the real world.

See above paragraph.

And keep those numbers, and go to vrbo and look at my remodeling skills. Mention this newsgroup, and we'll give you a discount. IF you pay cash, of course. ;-)
Steve
Heart surgery pending? Read up and prepare. Learn how to care for a friend. http://cabgbypasssurgery.com
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http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
I didn't read the article but it's what realtors have already told me. Make the house look like the new owners can do with it what they want to. If you have siding, roofing or painting issues deal with those, but renovations are usually a waste of time and money.
There are exceptions. I redid the floors in my old house and it did make my house more sellable. I don't think it drastically raised the price but it probably did make the house sell a little faster. I didn't spend much money because I did the work myself. I just took up the carpet and sanded and refinished the existing wood floors.
Do all the cheap things, but save the major renovations for the new owners. Don't try and second guess what they want to do with their new house.
There is a house down the street from my house for sale I could have ready to sell in a couple of weeks but it's going to sit for along time and it just needs new siding and a fence fixed. Simple stuff like that is a no brainer. It's a shame because it's a nice house and they are asking well below market.
Jim
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Agreed. Landscaping, particularly in the front, makes it more saleable. Any money put into selling should go into exactly what you say; make it look like new.

Concur. We redid the vinyl flooring in the downstairs hallways, kitchen-dining room, with bamboo. I replaced all the crappy floors in the bathrooms with tile (though I did most of that before deciding to sell) and had the house recarpeted just before we sold. I also went through the house and pulled down all the woodwork and doors, restained and replaced what was bad, and put it all back up. I wasn't working (retired, though not permanently), so had some time. All in all, I put perhaps 10K into the house the two years before selling it. All of it I would have done if we hadn't sold, though perhaps not with the same materials on the same time line.

Paint is cheap. Paint a neural color - make it look new. They can paint it black.

Are they in a bind financially? Can they have the work done, or are they (and their agent) just clueless?
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My guess is they moved and just left the house the way it is. This street has a few rentals. May have been a rental and now the owner wants to sell.
I agree totally on the front yard. Also the main entry doors are something everyone sees and touches. Cheap to fix and/or replace.
Jim
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responding to http://www.homeownershub.com/maintenance/Article-Most-home-renovations-don-t-pay-off-604107-.htm DA wrote:

http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
Well, the article specifically described additions and improvements as opposed to fixes. And, since the whole concept of "home value" (as in "adding to home value") only becomes realized through the sale of the home, I could never understand why people do any improvements just before putting the house for sale.
You are right, there is no way to second guess what the new owner would want. Maybe all they want is a cheap house which they'll use as blank canvas to improve it the way THEY want it. Maybe the reason they are buying is because the house is 15 min drive from their work and not because it looks nice.
I would put any money that would otherwise go into improvements/additions before the sale into a special account I'd call "bargaining power savings account".
I had a rather old A/C in the last house I was selling when the market was already very bad. It would have been a $6000+ expense to replace and there was really no telling that it would improve the chance of selling the house a single bit. So I didn't do it. It turned out offering a $2,500 discount and $2,500 seller assist seals the deal better than any $5000 improvement would.
------------------------------------- /\_/\ ((@v@)) NIGHT ():::() OWL VV-VV
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On Wed, 17 Nov 2010 17:48:07 +0000, info_at_1-script_dot snipped-for-privacy@foo.com (DA) wrote:

All good points. I'll remember that "bargaining power savings account". I've only had 2 houses, and sold none, so my experience is limited to that. I'm the "blank canvas" type. Probably more likely to reject a house because of "improvements." A lot is personal taste. I remember when we were looking for our first house the realtor bragged up the finished basement in one we looked at with the "Pride of ownership" line. When I saw it the first thing that came to my mind was, "Man, I'm going to have to tear all this stuff out." I'd feel the same if I saw a hot tub or jacuzzi or swimming pool. "Move in" condition is probably most important for a fast sale. Hard to figure what turns a house on for a buyer. When we bought this house it was empty, clean, and newly painted. Nothing needed repair. Price was right. Small kitchen without much counter space. Old built-in cabinets with worn formica counter tops. I thought it'd be all over when my pro cook wife saw that small kitchen. Nope, she loved the place. Go figure. And as you said, cutting our commute time from 45 minutes to 12 didn't hurt at all. That's why we were looking here.
--Vic
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On Wed, 17 Nov 2010 17:48:07 +0000, info_at_1-script_dot snipped-for-privacy@foo.com (DA) wrote:

You wouldn' believe how many 30,000 kitchen renos and 20,000 basement redos I've seen torn out by the new owner - less than 6 months after the original owner did the work to "improve" the home for sale. Solid oak cabinets with granite counters, island, florida ceiling, and new stainless steel builtin appliances - GONE - most of it into a dumster And a few months later the whole basement stripped back to the bare walls to install a new "media room", or the "media room" stripped out for a kiddies play-room.
Adding a second bathroom in.a house that has only one will usually get you your money back. A third bedroom in a 2 bedroom house will get you about $15,000. A dated kitchen will cost you about $6000, while redoing the kitchen will cost you a minumum of $8000 to $10,000. Better to sell for $6000 less than spend $8000-$10,000 to get your price.
A good driveway, solid and attractive front porch, good sidewalks, good paint and/or maintenance free soffitt and Fascia, and doors and windows that fit are all worth spending a bit on because their lack will cost you more than it costs, generally speaking, to bring them up to standard.
If you are going to spend money on a house to sell it, new roof (if required) and windows (again, if required) are usually a pretty safe bet.
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Red Green wrote:

http://finance.yahoo.com/real-estate/article/111220/home-upgrades-more-cost-than-value?mod=realestate-homeimprove
Hmm.
I can think of a couple of "home improvements" that WILL add more to the sale of a house.
1. Trees. A smallish tree can be had for $25. As it grows it increases in value.
2. Insulation. It not only adds value to the house, but, pays back the owner the longer between adding it and selling the house.
Most of us are somewhat handy and little things - for relatively little cost - can add to the overall value. For example, my 4-car garage came with one garage door opener. Diligently watching Craigslist yielded one more for free (needing a $17 gear) and another for $50. I'm still looking for the fourth.
I replaced a crummy enameled kitchen sink with a stainless one (with faucet and flexible washer) for a mere $15.
And so on.
Many times it's the little things, and attention to detail, that can make a house a great attraction.
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