Author Topic: How to value additions/renovations  (Read 2391 times)

dantownehall

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How to value additions/renovations
« on: July 31, 2015, 08:51:33 AM »
Hi,

I'm adding a deck to my house and doing it all myself.  I've been somewhat dismayed to see the money flowing out of my accounts for materials, and I feel like that would be psychologically helpful to get an idea of how much value I'm adding to the house.

Anyone have any resources/ideas about how to figure that number out?

Thanks,

-Dan

Cromacster

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Re: How to value additions/renovations
« Reply #1 on: July 31, 2015, 09:10:23 AM »
*I have never really looked at DIY project with the added value in mind.  I usually look at what I am saving versus hiring out the job.

How much would it be to hire out a deck project, 5k?  I can't imagine the materials being more than 2k.  Right there you saved 3k!

*I definitely would consider the added value if doing a kitchen remodel or something major, but thus far none of my DIY projects have been so impactful to home value.

Pigeon

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Re: How to value additions/renovations
« Reply #2 on: July 31, 2015, 09:53:30 AM »
You can download data for your area showing how much value you can expect to recoup on renovations, both nationally and for your area  here
http://www.remodeling.hw.net/cost-vs-value/2014/

dantownehall

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Re: How to value additions/renovations
« Reply #3 on: July 31, 2015, 11:38:35 AM »
*I have never really looked at DIY project with the added value in mind.  I usually look at what I am saving versus hiring out the job.

How much would it be to hire out a deck project, 5k?  I can't imagine the materials being more than 2k.  Right there you saved 3k!

*I definitely would consider the added value if doing a kitchen remodel or something major, but thus far none of my DIY projects have been so impactful to home value.

I see what you're saying.  It should be relatively inexpensive, but compared to my usual spending this month really stands out.

I'm doing this mainly to have a deck, not really primarily to add value to the house (although if I do, that's a nice bonus!).

Materials will come in around $1-1.2k for a 14' x 14' deck, which isn't bad IMO.  I'm using Home Depot gift cards bought through vendors on giftcardgranny.com to keep costs down.  And I'm enjoying the work; it's nice to come home and do something physical after all day at the office.

You can download data for your area showing how much value you can expect to recoup on renovations, both nationally and for your area  here
http://www.remodeling.hw.net/cost-vs-value/2014/


Thanks for the link!  I'll check it out.

paddedhat

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Re: How to value additions/renovations
« Reply #4 on: July 31, 2015, 07:19:08 PM »
I would really caution anybody who gives any weight at all to cutesy "value calculators" that tell you what kind of return you are going to be seeing from remodeling, or addition work. There are many reasons that these things tend to be wildly inaccurate and optimistic. Unless somebody is going to be buying your house for cash, and has no interest in actual value, the local market decides value, and appraisers determine exactly what those numbers are. For example, a basic two car garage addition in my area will run in the high twenty thousands range. The appraisal will be for $14-16K, since locally garages are values at $7-8K per bay, a tiny fraction of the number stated in the value calculator. There is also the concept of being functionally adequate. You own an old wreck of a place with a really sad kitchen, and decide that you will drop $20K into the kitchen, since it's a "good investment" well, good luck with that. The barely usable kitchen you had, without enough outlets on the counter, no dishwasher, and a fridge on the enclosed back porch was not considered to be functionally adequate, and would negatively impact the appraised value of your place. The new one you just dropped $20K on, did not raise the value by that amount, it addressed defects that existed, and made the place functionally adequate. It's no different that walking to the back of a house for sale and seeing a ledger nailed to the wall, where the deck should be, and a patio door above it leading to a six foot drop. The lack of a deck negatively impacts the value. Spending a few grand to install one, doesn't greatly increase the value.

In the OP's case, build a deck because it adds value to your life. Chances are it will increase the value of the place by at least what you spent on material, and that's a nice bonus, but when it comes to improvements and value, it's a tricky and often disappointing to see how little ROI there really is, in the end.