November 2015 — Real Estate & Home Builders Guide — Page 5M
Make home improvements for yourself
unless you plan on selling right away
By Ilyce Glink and Samuel J. Tamkin
Tribune Content Agency
Q
We are in the process of updating our
kitchen in Atlanta, including buying all
new appliances. We’re not sure whether
we should spend basically double the price to buy
pro-style appliances (which frankly don’t get great
ratings) or buy higher end appliances, which do
pretty well in testing.
I’m thinking that, for resale, it will be better if
we have the very high-end appliances, but I don’t
know if the resale angle Musti¿es the price. 2ur
house is worth about $600,000 or so, so we’re
in a “nicer” house, but we are not in one of the
multi-million dollar homes that almost require
pro-style for certain buyers.
What do you think?
It’s always hard to decide what to do in a
home when your gauge for determining
what upgrades or modi¿cations you
make to your home is the eventual resale of the
home. Since it does not appear that you are selling
soon, the real question for you is what do you feel
most comfortable living with over the ne[t ¿ve to
10 years? If you won’t get the enjoyment out of the
very high-end appliances and feel that you might
have to put in more money over the years to keep
them up, you might be better off with more reliable
appliances.
If a refrigerator sells for several thousand
dollars but the high-end one sells for $8,000, you
have to wonder if you’ll enjoy spending double the
money now without knowing whether you’ll get
that money back ¿ve or 10 years down the line.
You can talk to one or more real estate agents
in your neighborhood and ask them if there is
any premium that sellers get when they have
very high-end kitchens in homes of your type.
In studies we have received, we don’t always see
home sellers getting more for their renovation
improvements to their home than what they put in.
The few examples that do seem to get more money
back than the money spent on a home usually deal
with decorating issues and clutter issues. If you
spend $2,000 painting the inside of a home that
was once painted with dark colors, you might see
getting much more than the $2,000 back when you
sell.
If you spend $500 decluttering your home and
making the home look more open, spacious and
clean, you could see yourself getting much more
than the $500 from a buyer that decides the home
is right for him or her. However, if you purchased
your home for $600,000 and decide to spend
$100,000 on a high-end kitchen, will your home
A
sell for $700,000 or more? If homes in your area
generally sell for $600,000 when they are in good
condition, your market may not bear the high-end
kitchen you put it. You might get more than other
homes, but you may not get back dollar for dollar
what you put into the home.
Frankly, if you put in that kind of money and
then live in the home for some time, the type of
buyer looking for the high-end kitchen you might
put in may not be satis¿ed at that time with your
appliances anyway. He or she may be looking at
the next best thing and not at what was the best
several years ago. If that’s the case, the prospective
home buyer might buy the cheaper home to can
put in his or her dream kitchen and not pay you the
premium that you might seek when you sell the
home.
This takes us back to our original thought, that
you should rehab the home to your liking, with the
appliances you feel comfortable with and will enjoy.
Live in the home for years to come, use the money
you save toward other things: college funds for
your kids, your retirement savings or savings for a
rainy day. Saving that money for other expenses you
may incur down the line may give you a far greater
reward than spending the money now and never see
much of a return for that money.
If you were buying and flipping homes, we
might have a different view. Home buyers in
your area may be looking for the very best even
in homes in your price range. But if you were in
that business, we’d expect that you’d know the
market for your buyers and would know what
return you’d get if you installed those high-end
appliances in the first place. Since you plan to
use this home and you’re not in the business to
flip this home, do what is comfortable to you,
choose what you will enjoy and don’t over-im-
prove the home solely to please some future
buyer that may or may not like what you have
done to the home.
Ilyce Glink is the creator of an 18-part webina-
r+ebook series called “The Intentional Investor:
How to be wildly successful in real estate,” as
well as the author of many books on real estate.
She also hosts the “Real Estate Minute,” on her
YouTube channel. Samuel J. Tamkin is a Chica-
go-based real estate attorney. Contact Ilyce and
Sam through her website, ThinkGlink.com.