Unless you are planning to live in your home for the rest of your life, beware of the below improvements that offer little to no return on the value of your home.
As a new homeowner, you are eager to get in and make your space your own; as you should! You might start with something simple, like painting walls or replacing light fixtures. Or, you might start by knocking down walls to help open up the space. Whatever your desire is, we strongly urge you to take a step back (put the hammer down for a minute) and evaluate what your long term plans are in this new home.
If you plan on making this space your forever home, then have at it! However, if you know you will only be in this space for the next 3-5 years, pump the breaks! At this point you should be looking at your home as an investment opportunity. So, what can you do to ensure you will get the best return on your purchase? Below we have listed the 5 WORST home improvements for sellers (or improvements that you should proceed with caution). Make sure you understand what will bring value to your home, and what will eat up your money with little to no return.
1. Structural Changes
Any time you are making any major structural changes to a home, in most cases you will need to get a city permit if you are within city limits. Depending on what type of project you have, you may need to hire an engineer, architect, and contractor to help you plan out your space. In today's market, not only are contractors hard to come by, most often than not, they are booked out for many months. You will have to ensure you are flexible to meet their time requirements. As you begin a project it is not uncommon to exceed your initial budget. Keep in mind the cost of materials have also gone up in the last year with COVID and high construction/development activity in the Gallatin Valley.
2. Home Offices
Building a home office, or dedicating an entire room to being an office, does little for your homes value. It only eats up space that a buyer might want to utilize as something else. We advise you to still utilize your space as an office, but refrain from attaching any large built-ins into the wall that will eat heavily into the overall size of the room, or doing anything that would make the space unusable as a bedroom in the future. If you do decide to include any type of organizational storage, make sure there is still ample space for a queen size bed, dresser, and two night stands. We would not encourage removing any closets as that would disqualify the room from being able to be called a legal bedroom in the future.
3. Kitchen Appliances
As you begin renovating your kitchen you will quickly notice there are a wide range of appliances with an even bigger range of price points. One mistake many make in remodeling a kitchen is buying "top tier" appliances that do little for the return value of their home. If your budget for your kitchen is only $10,000 (for easy math) and you decide to stick $5,000 into your appliances, you have already cut into half of your budget, and you might only see half of that in return. We encourage you to spend money in a kitchen remodel but advise to be cognizant of the price and the layout. Our biggest recommendation on kitchen appliances is to be smart. You do not need a kitchen built to serve a small restaurant in a single family home. Know your budget and stick to it.
4. Professional Painter
Professional painters are absolutely worth the money if you are painting your walls a neutral color. If, however, you decide you want to make a space more suitable for your liking in particular (bright colors, crazy wallpaper, cow murals); we highly encourage you to do it yourself, or phone a friend that has experience! You will likely not see the return in this investment as many home buyers can be offended or turned off by really bright colors in a space. Use the money to hire a professional before you list your home. Then, make sure you put your walls back to the glorious white or grey they once were.
5. Know your Neighborhood
One of our Agent's said it perfectly, "You do not want to be the most expensive home in your neighborhood" you will never see that return. If the value in your particular area hasn't caught up to the investment you are about to make in your home, don't do it. If you don't know what the value is in your neighborhood, MAKE SURE you reach out to your local Real Estate Agent. They can help you determine what makes the most sense for you and what you are trying to accomplish. They can steer you in the right direction, and get you back on track.
If any of the information above brings up some questions for you, feel free to call Broker, Tamara Williams at 406.223.6823. She would be more than happy to help you determine smart improvements that can bring a larger return on your future sale. You can also check out our blog "Prep Your Property to Sell" to learn what is truly important when you get ready to list your home. When that time comes, make sure you have a trusted, experienced Broker guiding you. With the craziness of the current real estate market in Bozeman, you can't afford NOT to have Tamara Williams on your side.
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