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Hi all,
I am not a RE professional but posting here to get your expert advice. I live in a house from 1960 that needs updating (Deck, windows, central air etc). I have been advised that spending that money on my house won't make sense if I am not going to live there for another 20 years ( I can move now or in 10 years, who knows but I am open to relocating to another city for a better career opportunity, when it comes)
My question is if I were to plan to live in this house another 3-5 years, should I update it? If I spend $50k in updates, will that be taken into account when I sell the house or will potential buyers/RE agents simply look at what the comparables are in my neighborhood and ignore the value additions in the house? The other day, my realtor ran comparables on a house in market and pretty much just used the square footage, rooms, bathrooms etc to compare. No consideration for other things like age of roof, updated kitchen etc.
I should add that we love our neighborhood and have elementary school going kids.
I can move now or in 10 years, who knows
but I am open to relocating to another city for a better career opportunity, when it comes.
I should add that we love our neighborhood and have elementary school going kids.
You need to nail down these questions; at the least how you would PREFER them to be answered.
Quote:
...if I were to plan to live in this house another 3-5 years, should I update it?
No. Keep it clean and functional and repair what is needed... but not much more.
And if after that 3-5 year period you're still reluctant to plan for longer ... same advice.
---
If the answer is an intention to remain there or in that same area until...
until your elementary age kids are out of college and on their own or longer...
iow to settle in for the duration ...
The things you mention, AC, windows, and maybe the deck, are not updates necessarily. They are maintenance items. ACs need replaced periodically. Windows need repairs. Decks need maintenance.
If you should need to sell your house, buyers will expect these items to be maintained properly or will expect a lower price.
You need to nail down these questions; at the least how you would PREFER them to be answered.
No. Keep it clean and functional and repair what is needed... but not much more.
And if after that 3-5 year period you're still reluctant to plan for longer ... same advice.
---
If the answer is an intention to remain there or in that same area until...
until your elementary age kids are out of college and on their own or longer...
iow to settle in for the duration ...
Agreed.
I would say you should do updates when you get ready to sell. What's in right now may be out in 5 years. In the meanwhile just keep the home in good repair.
We have flipped a lot of houses. The first ones we lived in for two years to avoid capital gains and we did this because years ago it was the only way we could afford to do it. We always did the upgrades first so that we lived in a nice house. We always made a decent profit because of what and how we bought in the first place. Having done this over and over again I don't know how anyone here is thinking they can answer this question for you without knowing the market there and what you bought, how much you paid etc. It all matters. There is no way any of us would know if doing updates would be profitable for you.
NEVER upgrade for the next owner. It's a waste of time and money. Somebody will buy your house for the appropriate price no matter what shape it's in. The more you put into it the less you get out of it.
Upgrade for yourself. Enjoy the upgrades yourself.
We have had our house appraised about 6 times (long story). The appraisers mostly compare based on a square foot comparison. They will make small adjustments for things that might make a difference, but they never even asked if anything worked. Various appraisers reacted differently to our house. Some used beautiful perfect high end houses as a comparison, some used basically tear down wrecks as comps.
We have a lot of upgrades (16K generator, tankless water heater, high end boiler for heat, finished basement with 2 bedrooms, bathroom, game room, laundry and utility room, a largish pool, CAT IV to every room, outdoor fire place, 260 s.f. sunroom, I forget what all else.). None of it mattered much at all. One appraiser gave the appraisal a $5,000 bump for the finished basement, another gave it a $20K bump. The others $0. Some counted the sunroom in the square footage, others did not and gave it $0 value. One gave us a $5K bump for the pool because it is enclosed (the pool cost about $65,000). The others all gave it $0. One said they see having a pool as a detriment. A few of them used better comps due to some of the upgrades, but most just ignored the upgrades.
We have flipped a lot of houses. The first ones we lived in for two years to avoid capital gains and we did this because years ago it was the only way we could afford to do it. We always did the upgrades first so that we lived in a nice house. We always made a decent profit because of what and how we bought in the first place. Having done this over and over again I don't know how anyone here is thinking they can answer this question for you without knowing the market there and what you bought, how much you paid etc. It all matters. There is no way any of us would know if doing updates would be profitable for you.
Quote:
Originally Posted by Coldjensens
We have had our house appraised about 6 times (long story). The appraisers mostly compare based on a square foot comparison. They will make small adjustments for things that might make a difference, but they never even asked if anything worked. Various appraisers reacted differently to our house. Some used beautiful perfect high end houses as a comparison, some used basically tear down wrecks as comps.
We have a lot of upgrades (16K generator, tankless water heater, high end boiler for heat, finished basement with 2 bedrooms, bathroom, game room, laundry and utility room, a largish pool, CAT IV to every room, outdoor fire place, 260 s.f. sunroom, I forget what all else.). None of it mattered much at all. One appraiser gave the appraisal a $5,000 bump for the finished basement, another gave it a $20K bump. The others $0. Some counted the sunroom in the square footage, others did not and gave it $0 value. One gave us a $5K bump for the pool because it is enclosed (the pool cost about $65,000). The others all gave it $0. One said they see having a pool as a detriment. A few of them used better comps due to some of the upgrades, but most just ignored the upgrades.
I really sympathize with coldjens -- in MANY parts of the country the sorts of things that he has done to make his home nicer are NOT going to result in ANY appreciable gain in selling price. Even in the most "upscale" neighborhood about the best that will happen is that the buyer(s) that do appreciate these things MIGHT make an offer a little quicker and be more "forgiving" of minor negatives that will inevitably be found on the "home inspection"...
The perspective of "ILB" is very important too -- if there are 'comps' that are selling like hotcakes even though they are in WORSE shape (like in most of the Silicon Valley and parts of pacific NW where tech employment is driving purchases...) it makes NO SENSE to make these upgrades or frankly to even do "maintenance" for something the affluent new buyer may rip out / tear down... OTOH in parts of the country where buyers are scared off by any house that is not "magazine perfect" the decision to go to market with any sort of "deferred maintenance" may result in ONLY low ball offers from flippers who would gladly use that cushion to make this place into a showplace that has buyers running over each other...
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