The new tax code limits the deduction of state and local property taxes, as well as income or sales taxes, to a total of $10,000. When the tax reform legislation was put into law at the beginning of
WAYS TO ADD VALUE TO YOUR HOME
Let’s talk about getting the biggest bang for your buck when it comes to home repairs and renovating. This is something I’ve surprisingly never addressed on the blog until now- which is crazy because it’s something Emmett and I focus on with every home renovation we complete (from here forward). Click through for tips on adding (and increasing) the value of your home, to see which rooms are smart investments, and why you should alwaysconsider the resale value of your home. This post also turned out to be really raw and honest (aka long)– it might also give you some insight into the life that Emmett and I lead and our future plans.
I’ll start by saying, it was never our intention to “do this”- this being finding the worst home to renovate. We fell in love with the charm and character of our Ohio foreclosure and fell even more in love with the process- so much so, that we literally haven’t stopped renovating and making changes to our home since. Here we are, six years later, in a new state doing the exact same thing and learning new things along the way.
Some people ask if we’re house flippers and the answer is a solid NO… at least at this stage in our career. Although it might look like we’re “flipping” a home, we like to renovate, give a home it’s maximum potential, and enjoy living in it for awhile. Flipping to me is fast and all about the money or profit. That means lots of inexpensive and low quality materials are used to transform the house (although there are exceptions). We’re actually doing just the opposite: we use quality materials that are functional and aesthetically pleasing, and we transform the home to fit the needs of our lifestyle because we always stick around for 3-5 years.
Is this our forever home? No, because like I mentioned- we LOVE renovating and this crazy process. I’m also a person who craves change. Emmett is the type of guy who always needs a project, and together- we have a real sense of adventure … moving and starting fresh is exciting to us! Don’t worry, we have plenty left to renovate, love, and live in before we move along to the next, but my point to sharing alllllll of this is to say- this lifestyle we’ve created influences our reno decisions. We have to think about resale value because this isn’t our forever home. I suppose we fall somewhere in the middle of the spectrum…. we don’t flip and use the cheapest materials, we love and appreciate quality (but let’s get real- we’re middle class and certainly not rich), but we are willing to invest in and enjoy our home while we can.
So, what does all of this mean? Every design and material decision we make is based not only our personal preferences, but also on the resale value of our home. If you’re not in your “forever home” you should also be thinking about these things. Hopefully these tips and insight will help you make informed decisions that will eventually pay off when it’s time to sell. I didn’t use to think this way, but being married to Emmett has it’s perks. He does accounting for a living and he’s a total numbers guy. Excel is his jam and when we decided to renovate again, he explained how this time we’d be smarter. It made perfect sense.
H O W T O T H I N K I N T E R M S O F R E S A L E :
Don’t purchase the nicest home on the block. // In fact, we always look for one of the worst. Why? It’s a shame to buy home that’s turnkey, knowing we’ll rip out the perfectly functional kitchen to make it our own. That wouldn’t be a good investment either- especially when we know we can increase the value and totally transform a diamond in the rough.
Invest the smart way. // It seems like if you update a house to the nines and it’s absolutely breathtaking- you should make all of the money you poured into the home back, right? Sadly that’s not true. I sort of learned this the hard way. Not knowing we’d fall in love with renovating and want to do it again, our first home was a true learning experience. I picked out beautiful materials and we renovated without resale in mind. Here’s the thing, if our home was a 10, the majority of our neighbor’s homes were a 3. The neighborhood curb appeal was lacking, they weren’t updated, and the location wasn’t a sought after area. You have to consider the location, the neighborhood, appraisal values, and all sorts of things. In hindsight, I probably shouldn’t have selected an $800 faucet when the home could only sell for so much. No matter how breathtaking and exquisite our house was, it would never sell for double what our neighbor’s homes cost. We pretty much broke even, but we loved that house and it’s finishes- so it’s ok… but we could’ve turned a profit if I would’ve been smarter. It was the perfect learning home.
I’ll give you a straight shooter example: let’s say you purchase a home for $100k. Based on market research and appraisals, you think you can someday sell the home for $150k. It would be stupid to spend $80k on upgrades, knowing you’re going to lose $30k. That’s a dumb move, right? You can’t put more into a house than you’ll get back (unless money isn’t an issue for you).
Don’t blow the budget. // Keep records. I cannot reiterate this enough. Emmett keeps a detailed Excel file of every dollar we’ve put into our house and reno. Prior to purchasing, we tried to guesstimate how much would go into each room. Obviously the plan evolves, but if we only have $30k to put into the kitchen, that’s it. Once it’s gone, there’s no more buying this and that. We could “borrow” money from another room- like my office, but that might mean the office reno never happens. We’re pretty good at planning, but it’s important to stick to the budget if you want to make the money back someday. You don’t want to end up like my example above- I’m sure it’s a bad feeling knowing your hard work, time, effort, and fancy fixtures actually lost you money.
Ask a professional. // Strangely, lots of our friends are real estate agents (if you’re moving to Utah, I’ve got guys.. ha!). We definitely like to pick their brains, stay informed on the market, our neighborhood, and future projections. If they were to tell us to hang onto this house a year or two longer, we would trust them. If they tell us to sell a year early, we’d also listen. We adore our neighborhood and location, so adding on and staying longer is something we fantasize about. You better believe we’ll be asking all of our professional friends to come over before we make the final decision to help us decide if it’s a smart investment. It would be naive of us to add a garage and master suite (no matter how badly we want it), if we’ll never recoup the cost. Again- you don’t want to be the nicest / biggest home on the block if you’re thinking in terms of resale because the value of your neighbor’s property will influence your own (hopefully it would increase the value of your home).
W H E R E S H O U L D Y O U P U T Y O U R M O N E Y ?
This might seem like a given, but you’ll get the biggest bang for your buck by spending the majority of your budget on the kitchen and bathrooms, closely followed by the master suite. I’m guessing 90% of us have a budget to stick to when it comes to our homes. If you only have so much to spend, spend it here:
The Kitchen // A renovated and updated kitchen is so appealing to buyers. Whether you only update the appliances, or go all out and redo every single thing (like us), every little upgrade is a good investment.
The Bath // Bathrooms should be high on your renovating or updating list. New plumbing fixtures and tile go a long way in terms of resale.
The Master Suite // Mather suites are so convenient and obviously sought after. If you have a large master bedroom, it might be worth making it smaller to add an attached bath- or renovating the existing master suite altogether.
Above all, keep quality in mind. I’d rather see two totally transformed rooms that every single room with terrible materials that weren’t installed properly.
T H E D E S I G N S T R U G G L E
Keeping resale value in mind certainly influences my design process and selections. Thinking of our home in a business sense might seem odd to some, but it’s honestly incredibly smart. Having budget parameters helps me narrow down the vast array of products on the market. It also presents a fun design challenge for making things look higher end than they actually are. Challenge accepted (obviously)! That’s always my goal and that’s what will help us gain a return on our investment. However- it’s not always peachy and presents certain things I struggle with…
Creativity // This is the most difficult part for me when designing with resale in mind. It means I can’t go as wild as my brain would like. I try to get weird with paint colors (because those can easily be changed), but when it comes to permanent fixtures and materials- like tile, stone, flooring, sinks, vanity, faucets, etc… I have to keep it appealing to a wide range of people. It’s a delicate balance to keep it well designed, within our budget, keep an eye on quality, as well as make a space unique enough to stand out and be innovative, yet appealing to buyers. I’m not sure if that makes you guys like me more or less? Ha! I’d like to get wild, crazy, and weird… but since I’m not made of money, resale is definitely a big factor that comes into play. If you think my aesthetic is too tame, it reflects our current business model. It’s almost like designing for a client!
I will say- occasionally there are items we want or just have to have that aren’t practical in terms of resale, but if we’re living here for 3-5 years, they’re worth it to us.
The Guts // I refer to the portion of the budget that goes toward fixing things that typically go unnoticed as “the guts”. We’ve spent an insane amount of money on things that the average buyer won’t even notice (in both of our renovations): updated plumbing, electrical, insulation, sod, windows, roofing, etc. I could go on and on. Sometimes it’s disheartening to spend so much on things that aren’t pretty, but they’re very important. While they may or may not add value to the home, Emmett and I have always vowed to renovate the right way… from the inside out. We take our time and make sure everything is safe, to code, and permitted.
The buyers who purchased our Ohio home were SO appreciative. We handed them a a giant binder full of paperwork, permits, paint colors, instruction manuals, warranties, etc. It made us feel good that they valued our hard work; they also promised to upkeep and care for the home like it deserves. That seriously gives me the warm and fuzzies inside, and when I’m back in Ohio, doing a creepy drive-by, I’m comforted knowing that it looks amazing, is appreciated, and the exterior is still well manicured. We created a place we adored, and now a new family is loving it just as much… that’s special!
When It’s Time // I’ll have to devote an entire post to prepping your home to sell. I did want to quickly say, when the time comes, there is definitely a list of “makeunders”, as I like to call them, that need to happen. Sometimes we’ll touch-up paint, stage the home differently for showings, remove personal items, tone down funky decor, textiles, or paint palettes. Basically we want to make it look appealing for the the most inhabitants. We also “de-dog” (another term of mine) the entire house, removing evidence that two crazy pups rule the roost. In this home, I’m pretty sure we’ll have to skip that step because we’re planning built-in dog crates for the laundry room and that’s a permanent architectural feature (another time resale went out the window). Doesn’t everyone in America have a dog these days? Ha! If not, we can’t be friends…. they make life better and buyers will have to deal with that (and my dog-friendly attitude).
O U R F U T U R E
If you’re wondering about the personal stuff… I’ll close by saying: this is our current outlook- renovate the right way, enjoy the home for a handful of years, and get excited for the next big adventure. I’m not saying we’ll never “flip” a house on the side (it’s actually one of Emmett’s dreams)… but I hope we’re the exception who do it the right way when the time comes.
We also dream about buying a fixer upper CAMPER. I mean, we live in Utah… one of the most breathtaking states in the country. We both decided we’re “outgrowing” tent camping and the dogs would be easier in a camper. Maybe someday we can save up and document that process. Doesn’t it sound fun? Sharing our adventures from our home away from home? That’s a totally different ballgame, and I personally don’t think it’s a great investment- but it would be FUN. It’d make the guy very very happy; anything for him.
We’ve also discussed the dream to renovate a “vacation home”… perhaps a beach cottage or a cabin tucked away in the mountains. We’re not even remotely close to having enough money to do something like that, and we’ve vowed to tackle one complete reno at a time, but the vision makes me giddy with excitement. Someday, maybe we can swing it!
Eventually, we’d like to build a forever home. I’m sure we have
years decades ahead of us before we even begin that conversation, but we like dreaming of the possibilities. That’d be the place we could make for us…. it could be weird, out there, personal, and ours to imagine. However, we have plenty of places to travel before we decide where it will be.
That’s pretty much my thoughts on resale, doing our best not to go under while renovating (and doing what we love), as well as the glimmer that is our hopeful future. I’d love to hear your thoughts and feedback! Was that post way too long and now you have zero effort to comment? Sorry guys!!
As a full time professional real estate agent & former airline pilot, I pride myself on offering superior personal service before, during and after your transaction. Knowledge, commitment, honesty, ex....
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