Ten Home Equity Tips
1. Don’t Buy a MFH, single or double. Manufactured homes are a lot like new cars, they both loose value as they roll off the lot. Manufactured homes are great for people who don’t want to maintain any home equity, people who have a difficult time getting loans for regular homes, or people who are looking to live out the rest of their lives in a low-maintenance home. But if you want to have equity in your home five, ten, even twenty years later, don’t get a MFH. Even after adding decks and landscaping and additions, even if it doesn’t look like a mobile home anymore, you’ll be lucky to break even. The reason? Banks don’t like them. The resale value is difficult to maintain, and sometimes houses disappear during foreclosure.
2. Dollar for dollar, kitchens and baths earn the most equity. You’ll get back in equity everything you put into a bathroom or kitchen. So, go ahead and add that extra sink in the master bath or put in a dishwasher.
3. Go with wood or tile, not carpet. Carpet is out; you’ll get more money for those old wood floors someone covered up with plush carpet over 35 years ago. Not only are wood and tile floors cleaner than carpet, they are a sign of good quality construction.
4. Don’t build a superior house in an average neighborhood. Most homes are average construction. Homes are getting bigger and bigger, over 2,200 square feet on the average, according to This Old House, but the quality is not getting better. Be careful not to over build. If all the houses in your area are around $43,000, your house may be worth about that no matter if you make a lot of improvements. Or it may get the appraised value equity, but you may not be able to sell it for the appraised value. So, don’t over build for the neighborhood. Appraisers use a cost approach to come up with the home’s value. The better the quality of construction, the more the value per square foot, the more value in the cost approach, which in turn increases your home’s value. To tell Good construction, real estate appraisers look for Pella, Martin, or Anderson windows (wood are best), oak cabinets, built-ins, crown molding, vaulted and raised ceilings with recessed lighting, extra bathroom fixtures, marble countertops and flooring, arched windows and doorways, hardwood floors, floor baseboards, narrow tongue and groove wainscoting, solid wood doors, etc., all in one house.
5. Central Forced Heat and Air is an easy way to increase the value of your home. Banks look for it, potential buyers look for it, and appraisers look for a good quality one to increase the value of your house.
6. Don’t put in the first swimming pool. It costs about $20,000 to put in a new in-ground swimming pool, but it’s only worth about $2,500 in an appraisal. This is especially true if nobody else in your neighborhood has a swimming pool, because then it is called “atypical.” Plus, it may not help resell you home, because some people do not want a pool. (small child’s hazard or maintenance issues)
7. Add a garage or a carport to increase the value of your home. But don’t take away living space to create a carport or garage, because living space is actually more valuable. Instead, add a carport or garage. Personally, I think garages added to the back of the house are more attractive than those added to the front.
8. Location, Location, Location. A good piece of land may end up making more money than building or remodeling a home, and it takes a lot less effort to maintain. As my mother says: “They aren’t making any more land.”
9. A workshop with electricity can add to the value of your property. As long as it matches your home in style and quality of construction, the addition of a workshop or storage shed can add to you equity. A poorly constructed shed can be a minus, meaning the appraiser will note that your house would be worth more if you’d tear down the building.
10. Fix your home how you’d like to live in it, not for the resale. It typically takes three to six months to sell a home, but that is not a guarantee. So, paint the inside of your house the way you’d like and fix it up the right way. Don’t rig anything, you’ll be the one who’ll have to fix it later.
2. Dollar for dollar, kitchens and baths earn the most equity. You’ll get back in equity everything you put into a bathroom or kitchen. So, go ahead and add that extra sink in the master bath or put in a dishwasher.
3. Go with wood or tile, not carpet. Carpet is out; you’ll get more money for those old wood floors someone covered up with plush carpet over 35 years ago. Not only are wood and tile floors cleaner than carpet, they are a sign of good quality construction.
4. Don’t build a superior house in an average neighborhood. Most homes are average construction. Homes are getting bigger and bigger, over 2,200 square feet on the average, according to This Old House, but the quality is not getting better. Be careful not to over build. If all the houses in your area are around $43,000, your house may be worth about that no matter if you make a lot of improvements. Or it may get the appraised value equity, but you may not be able to sell it for the appraised value. So, don’t over build for the neighborhood. Appraisers use a cost approach to come up with the home’s value. The better the quality of construction, the more the value per square foot, the more value in the cost approach, which in turn increases your home’s value. To tell Good construction, real estate appraisers look for Pella, Martin, or Anderson windows (wood are best), oak cabinets, built-ins, crown molding, vaulted and raised ceilings with recessed lighting, extra bathroom fixtures, marble countertops and flooring, arched windows and doorways, hardwood floors, floor baseboards, narrow tongue and groove wainscoting, solid wood doors, etc., all in one house.
5. Central Forced Heat and Air is an easy way to increase the value of your home. Banks look for it, potential buyers look for it, and appraisers look for a good quality one to increase the value of your house.
6. Don’t put in the first swimming pool. It costs about $20,000 to put in a new in-ground swimming pool, but it’s only worth about $2,500 in an appraisal. This is especially true if nobody else in your neighborhood has a swimming pool, because then it is called “atypical.” Plus, it may not help resell you home, because some people do not want a pool. (small child’s hazard or maintenance issues)
7. Add a garage or a carport to increase the value of your home. But don’t take away living space to create a carport or garage, because living space is actually more valuable. Instead, add a carport or garage. Personally, I think garages added to the back of the house are more attractive than those added to the front.
8. Location, Location, Location. A good piece of land may end up making more money than building or remodeling a home, and it takes a lot less effort to maintain. As my mother says: “They aren’t making any more land.”
9. A workshop with electricity can add to the value of your property. As long as it matches your home in style and quality of construction, the addition of a workshop or storage shed can add to you equity. A poorly constructed shed can be a minus, meaning the appraiser will note that your house would be worth more if you’d tear down the building.
10. Fix your home how you’d like to live in it, not for the resale. It typically takes three to six months to sell a home, but that is not a guarantee. So, paint the inside of your house the way you’d like and fix it up the right way. Don’t rig anything, you’ll be the one who’ll have to fix it later.
posted by John | 8:16 PM
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