How much do you take potential resale into account with design choices?

[bmw335xi]

If you plan to sell it within 5 years, then you should care more about resale value. If you are planning to live there more than 5 years, then you should care more about personal tastes.

[KathrynAragon]

Originally Posted by MainLineMommy

I'll never forget a dozen years back when my parents went to sell my childhood home. They had lived there many years. When they went to get ready to put it on the market, my dad starting listing off all the things they would do to make it more desirable... put a deck over the sunroom, do the landscaping out front, crown molding, etc. My mom had a fit. She said that they had been talking about doing those things for years, and if she didn't get to enjoy them then she sure as heck wasn't going to pay for the next person to have them. They could do it themselves.

I agree.

I remember this every time I consider doing something to me home. It's not an investment. It's a place to live and raise my children. While I don't want to depreciate its value by not maintaining it, I'm not going to treat my home as in investment. That's just stupid. Homes are an awful investment. Your money is much better invested in stocks and bonds and mutual funds.

It's not "one or the other" - a home can be a good investment as well as a place to live and raise a family. A home can also be a bad investment, or people can make stupid decisions about how much to put into a home in a particular neighborhood, or people can live like slobs and never update or maintain their home, thereby hurting the value of their own investment.

A home can be "bought smart" on the front end, can be kept for enough years for resale value to increase, or it can be bought in an area where property values continue to increase, maintenance tasks can be kept up, thereby keeping the house in excellent condition, and upgrades and updates can be done within the context of the current value of the home and with resale value in the future in mind - and if this approach is taken, a home can be an excellent investment as well as a comfortable, safe place to raise a family.

A home is a place to live. You want to maintain it so that there is some value there when you leave, but if that's your retirement plan, then you need to think about putting your money into something other than new flooring or cabinets.

I would never recommend that someone rely on simply their home as "their retirement plan," but property can be a critical element in one's retirement plan. It's foolish to overlook the value of one's home when planning for retirement.

Especially since trends will change and every single buyer has different taste. Unless you're planning to sell soon, your design choices should be your own.

There's no one size fits all statement for this situation. Each person's scenario is different. There are too many variables to simply say "Your design choices should be your own." Some peoples' design choices are absolutely ridiculous. Some people think they're going to live somewhere for ten years but life happens and they realize they have to move in two years. (The average for Americans to move is once every five to six years.) Some people will insist on spending wayyyyyyyy too much money in a neighborhood that simply won't support that amount of improvements - and of course they're free to make that choice with their own property, but that doesn't make it a smart choice. And some people have excellent taste, and are smart with their money, and some people would simply not be inclined to make improvements or changes without the idea of future resale influencing their choices. By that I don't mean that they forego their own personal taste and only make changes that other people might like - that would be ridiculous.

We did a complete backyard renovation last year, and I can't tell you the number of people who told us not to install an in-ground pool because we'd never get our money back and many buyers won't even look at a home with a pool. We love that pool. Our kids love that pool. We spend a huge part of our summer in it. I spent the money on something my family would enjoy. I couldn't care less whether the next owners want a pool or not, or whether I'll get my money back. I spent my money on something that my whole family, and most of our friends, really enjoy.

That's great - that's your choice. I would never tell you it was a stupid choice. But what I WOULD tell you is that if you EXPECT to get your money back (as many people do) then you need to look at several factors:

1. What percentage of homes in your neighborhood have pools?
2. Do comparable properties with inground pools sell for more per square foot?
3. If so, how much more? This would determine how much you could safely spend on an inground pool and still expect to recoup your investment, or a portion of it.

In our former home, we spent more on an outdoor patio area than we ever expected to get back - and we didn't get all of it back. But we enjoyed the heck out of it. And we probably WOULD have gotten that money back if we'd stayed in the house longer than four years, because property values were steadily increasing. But we needed to move, so we took the hit and I don't have any regrets because we enjoyed that outdoor area immensely for three years.

We also had a big chunk of equity in the house - which gave us some flexibility. This is important to consider because whatever happens, no one wants to actually have to write a check at the closing table, which can happen with foolish investments. What if, for example, we had bought the house with zero down and financed the full amount of the mortgage? Then sunk $20k into the back patio, and then had to sell the house in a flat market that hadn't really recovered from the recession - and had to pay closing costs? If that was the scenario, that back patio would have really come back to bite us in the rear.

If you're going to try to predict the future, you're better off buying stocks instead of tile. You'll get as much enjoyment out of the stocks as you would décor that's not your taste, and you'll have a better chance of seeing a return on your investment. In my opinion.

No one can make absolute predictions about the housing market, but that doesn't mean we can't make wise real estate decisions. Also, it's very possible to make good renovating/updgrading/decor decisions that please the owner, and that also take resale value into consideration.

[KathrynAragon]

We bought a house this past year that needed a lot of updating - it had been custom built in 1997 and hadn't been updated since then. It had "good bones" but 1997 jewel tone colors as well as that white carpet (that wasn't really all that white anymore!) and white tile that was so popular back then. UGH.

But we got the house at $74 a square foot, in a neighborhood where updated homes sell for $105 a square foot. So basically we have about $80,000 for a renovating budget, not that we'll have to spend that much. We will probably end up spending about $65,000 over a three year period. But I would NOT spend $100k and expect to get every penny of that back. It won't happen - not within the next ten years - unless we are very, very lucky and this area booms economically.

We're also careful about where and how we spend that money. Paint is cheap, so I don't worry about paint colors, though I don't have crazy or off the wall ideas about wall colors anyway. I prefer a more neutral background in most areas, though for smaller areas like powder rooms or minor bedrooms, I might do something more intense or unusual with paint.

We spent a huge chunk of the renovating budget on the kitchen. I got MY dream kitchen, which includes soapstone counter tops. Not everyone likes soapstone, but the changed footprint and added cabinets (which was a huge chunk of the kitchen budget) would appeal to just about anyone because now the kitchen is much more functional and spacious. Not everyone likes moss green cabinets either, but I figure that when the time comes to sell the house, people can either like the soapstone or change it out, and same with the paint. Overall, though, most of the money spent on that kitchen was on features that are pretty universally appealing - if someone likes the overall style of the home. Of course, that's not everyone either, but the important thing is that the updates have all been done with the overall style of the home in mind. Nothing is jarring or out of character with the overall style architecturally.

It's very possible to find that comfortable middle ground between what WE love and future resale value. All homes eventually go on the market. It's foolish not to keep that reality SOMEWHERE in the equation when doing maintenance and upgrades.

[Colorado^]

I think it's a very good idea to think about re-sale whenever you do anything to your house.

But that doesn't mean you can't get what you want, rather you should consider compromising in some areas.

Beside the main house, there's a 40x30 building on our property that has a kitchen & bathroom, but can't be used as a dwelling unless we were to purchase an adjacent block of land and have the property boundary's re-drawn.

It would make a perfect space for a movie theater and that's what I want to do with it, but I don't think we will ever get our money back on that one.