Smart Remodeling Caveats

Fitzpatrick-I agree with Peg’s previous post on almost all points, but there are some times when putting more money into a house than the neighborhood warrants actually pays off.

The first of these, Peg mentioned; when it’s your dream house and you don’t plan on leaving except feet first out the door. But even then, your heirs and/or caretakers might grumble if you’ve used all your equity to make it comfortable to the point of having no reserves for other things, such as home health care.

The second situation is when improvements will make a huge difference in your quality of life. For instance, if you install a pool and actually swim laps in it every day, thus improving your health and perhaps extending your life, or when you add a guest wing so an elderly relative can move in.

The third situation is one in which I and my husband find ourselves; buying into an older neighborhood that appears to be gentrifying. We’re in our 40’s and we’re the youngest folks on the block, our house was architect-designed, and it's within walking distance of one of the most desirable shopping hubs in town, which is undergoing its own gentrification. We walk to grocery, dry-cleaning, post office, bookstore and many fun clothing and coffee shops, high-end restaurants as well as cafes, and the only Whole Foods within 200 miles. There are very few houses for sale around here, and those tend to be snapped up by younger, hip professionals, even in this down market.

Interest in neighborhoods within walking distance of services is growing, and if you can find a house with architectural integrity in this type of locale, your remodeling investment may pay off. Not only in quality of life, but in actually bottom line net worth. We hope it will, anyway!

Smart Remodeling

Koontz - The housing industry on the West Coast is all abuzz of late as homebuyers watch their home values drop in a suddenly stagnant market. What does this mean to you if you are contemplating a remodel? It shouldn't necessarily stop your planning, but it should remind you to double-check your plans on your remodel. Are you investing your money in the right places for your home and your neighborhood?

We've talked about this before, but in down-turn markets it bears repeating. Unless this is the dream home that you never plan to leave, don't invest too much money in your remodel. You don't want to end up with the most expensive house in your neighborhood. Having the highest- end house in the neighborhood means you have a smaller field of buyers to choose from if and when you want to sell. As many sellers are finding out now, that is not the most desirable position to be in.

There were alot of people in the up-swing market who bought houses with the intention of upgrading them and flipping them. Much as my partner, Jodi, detests this industry, it's often a solid and lucrative endeavor. The trick though, whether you are remodeling to flip or you are remodeling for yourself, is to choose the right projects, i.e., those with the best return on your investment; and the right materials.

In our area, there was a great boom in the post-war housing neighborhoods during this up-swing. Sadly, the remodelers installed all the wrong, (and overly expensive), materials and destroyed much of the existing value of the houses they bought. Not only did they invest too much in their remodels/rehabs, but they made bad choices about what to improve. Post-war houses typically need upgrades like central heat and air conditioning, automated sprinklers, automated garage doors, additional square footage, (second baths especially), upgraded service panels and more electrical outlets, and for the way many of us live now; more open floor plans.

Instead, these flippers chose to replace tile with granite (WRONG!), put fancy front-doors on simple little porches, yikes; re-face exteriors with pseudo-fieldstone or new lace style dash coats, totally out of era; Replace solid wood kitchen cabinetry with new oak cabinets, (I swear if I never see another oak kitchen cabinet it will still be too soon); and generally, spend too much money on style rather than substance.

Now, when there's not a buying boom driving people to buy in a frantic market, buyers looks at these houses and recognize that they aren't worth the asking price, often because there is still too much investment on the new owners' plate to make the house a comfortable living space.

Whether you are remodeling for you or for the flip, pay attention to the details that make living in a space easier. That's kind of the point to remodeling!