Is there a budget formula for improving without over improving? I'm looking at renovating the Master Bathroom and the Kitchen. (very dated, cheap builders grade stuff that is falling apart)
I want to set a reasonable budget, make improvements that I can enjoy, but also get the maximum return possible on my investment.
I'm looking for some kind of formula (if it exists) that says something like "for a home with a value of $X, spend between Y-Z% of the total value for maximum value on a bathroom renovation." Or a similar formula for a kitchen renovation.
Does this exist? Or something similar?
What most go by is the value of homes in your neighborhood that compare in size of home and land and updates .That usually goes by what homes have sold for that are similar to your house .i know my house is over improved for my neighborhood and is also the largest house in the neighborhood .But to start with i paid less for my lots than they did and less for my house than they did for there's .My house was done in 2004 and nearest to my house sold 3 months ago for 174 thousand and was on 5 acres and house was 2240 sq ft and my house is 2440 sq ft on 3 acres and I paid 89 thousand and then after it was done I put another 27 thousand into it .Plus my lots are not combined and I bought 3 1 acre lots and house is on only one of the lots so I could sell the other 2 lots .I thought ahead before building .Just compare apples to apples when it comes to the closest house to yours .Like they say it all comes down to location ,location .That will up the value .Here we are rural so we loose .
You are very smart to consider this before just plunging in. Friend wayyyyyyy over-improved their condo and now want to move. They say they can't take a loss and have been sitting/waiting for a buyer for about 3 years. Meantime, the neighborhood is declining rapidly and there are sev other houses w/4 sale signs.
very true cjo as I have several friends in NJ on the market for 2 or 3 years and they cannot get what they paid for there houses 15 years ago and the longer they stay on the market the less interest in them .The market is only good in some areas of the U.S. and seems in most areas it is just going down .So it really depends on the area you live in .In 2 years you really have no clue where the market will be and if people will even be able to get mortgages .I always say have a savings to fall back on also .Remodels end up always costing you more than you plan .Value is only there if you live in a good area .Even that can go down if jobs are not there .
Thanks for the feedback.
We bought about 10.5 years ago. (the house is nearly 20 years old) Not the absolute worst time to buy- but we have lost value in the house. We refinanced a year ago and were told that our house was better than average for the neighborhood, but not over-improved- which is exactly where we want to be. (I have been doing DIY projects the entire time we've lived here)
I have DIY skills so I can save loads on labor costs. The kitchen could probably last a bit longer. We are replacing appliances piece by piece and have only the range to replace now.
The master bath is a disaster bath. It is not just about dated features- there are some fixtures that are literally falling apart.
Both the kitchen and bathroom are suffering from poor layout. I think they were designed to look good to buyers, and be easy for the builder to install.... but not for everyday living.
I've been torn between doing a "designed to sell" renovation- which would update fixtures and finishes, but keep the same dysfunctional layouts- or spending a little more, improving the layout, and having a space I can enjoy and that will also sell in the future.
I do know this is not my forever house. Ideally, we will try to move within the next 3-4 years. If the market for selling isn't going well at that time, we would consider renting out our house. (a whole different set of challenges)
What it comes down to is knowing how much to spend, then stretching that dollar as far as I can through clever shopping and lots of DIY. I need to consider what I will enjoy, but not go overboard.
I think by making a better layout of the bathroom won't recoup the cost but will make your home more attractive when placed next to the other homes for sale when you make that decision.
As for the kitchen - a fresh clean kitchen sells. I would not sink a fortune into a house you only plan to enjoy for another 3/4 years but I don't believe in living with something you don't like just because you will not recoup your entire investment. So if you will be happier walking into a kitchen with a solid surface countertop and tile floors, then you should do it. I would especially encourage updating the flooring if nothing else and put in a tile backsplash.
By the time you sell most of your improvements will be a little dated. I think the slow down in the housing market has helped reduced the turnover in what is trendy.
If it will help, visit some of the homes currently on the market in your area to see what is popular and what the neighbors have done.This message has been edited. Last edited by: Charming,
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