We outline nine factors affecting your home’s value below.
Not all upgrades are not created equally. Kitchens and baths sell homes. Focus your remodeling dollars on areas that attract the largest number of buyers. Additionally, don’t over remodel your home for your neighborhood, because you’re unlikely to recoup your investment. Lastly, keep with trends that last and are more than a fad.
Even an older home can look new again. Cosmetic fixes are usually the easiest — paint the property, clean the gutters, mow and straighten up the landscaping. Inside, patch and paint walls that need TLC, and with today’s flooring less expensive than ever, look to use luxury vinyl tile/plank, which is less expensive than hardwood flooring and much easier to install. Modern cabinet pulls can make a huge difference in the kitchen and bathrooms, and countertop options continue to grow, while we see the prices dropping.
Keep in mind: deferred maintenance can quickly go from $100 to $1,000! Stay up with your maintenance and walk the inside, outside, basement, attic, and crawlspace every month — helping you locate small issues — before they become expensive problems.
While property size is often a key factor in home value, lavish mansions are not exactly for everyone. “There’s more upkeep and a lot more involved with taking care of these huge houses,” says Florida-based realtor Amy Anderson of Davidson Realty, Inc. When considering an addition, stay special attention to the neighborhood’s size, keeping your finished addition within 120% of the neighborhood’s average home size.
Let’s face it, layout matters and more people want an open floor plan, because it helps make the room look spacious. The ideal number of rooms depends on buyer preference. According to Zillow Chief Economist, Stan Humpries, larger rooms are generally preferred over more smaller rooms, because it tends to increase a home’s value.
When we remodel our homes, we look to combine two bedrooms into a larger master suite (five-piece bathroom with his/her walk-in closets), or combine a formal dining room with the kitchen (kitchen and baths sell).
No matter how desirable your property, home buyers are easily put-off by unruly neighbors. What’s worse — living next to a known sex-offender or someone with a serious criminal record. These can affect neighborhood’s value.
Most home buyers look for a quiet and peaceful neighborhood — particularly those who wish to buy a home that can serve as their retirement home. It isn’t surprising loud neighbors impact your home’s value. Likewise, highways, trains, and airports affect the tranquility for any prospective home buyer. In fact, a study statistically demonstrated noise pollution originating from nearby airports, negatively affects residential property values.
For families looking to buy a new home, proximity to high-quality schools is often non-negotiable. According to Global Property Guide, buyers pay more — sometimes much more — for residential properties within the vicinity of reputable schools.
Although we highlighted this above, it warrants its own section.
When remodeling your home, don’t over improve your home. Home prices are driven by similar homes in the area (“comps”), which means, you don’t want a million dollar home, in a neighborhood with an average price of $500,000, because buyers are unlikely to pay much more than the average price in the neighborhood. Exceptions exist, but you’ll find these exceptions are rare and often make common sense.
Keep your remodeling consistent with the neighborhood, because splurging on expensive remodeling is usually money down the drain.
The “Starbucks Effect” is real and it’s based on Zillow research, which demonstrates home values increase when they are within a quarter-mile of a Starbucks. According to the study, homes in close proximity to the coffee shop experienced a surge in value by a whopping 96%, vs. 65% national average, between 1997 and 2013. And, it’s not only Starbucks that help home prices rise. You’ll witness home appreciation near Dunkin’ Donuts and retail giants like Whole Foods and Wal-Mart. Walking distance to LightRail stations, public gyms, theaters, grocery stores, etc. all help home values increase.
When possible, wait until the foreclosed property next to your house sells. It isn’t surprising the foreclosure on your street affects your home’s value. One research project found a non-foreclosed home’s value dropped by 1.3%, when within 300 feet of the foreclosed property; it decreased by 0.6% when within 300-500 feet of the foreclosed home. (1.3% of a $500,000 home is $6,500, and all because a foreclosed property is on your block!)
Homes where crime occurred can drop a whopping 10-25%, according to real estate broker, Randall Bell, who specializes in real estate damage valuation.
Consider these items when looking to add value to your home for years to come. Have questions? Comment below.