Remodeling and Expanding Your Home
You love your location, but you are growing to hate your home. It is simply too small, awkward and out of date, so you consider moving.
Remodel Your House
After looking at what is available, and the hassle of picking up to ready your house for sale, let alone finding a suitable house in the price range you are comfortable with, you start entertaining the idea of remodeling and expanding your home. Who wouldn’t? Of course, before undertaking a large project, getting an idea of where you currently stand in terms of your property’s value, and where you will stand after the project is completed, is a good idea.
If the idea of spending a few hundred thousand to make the house of your dreams does not scare you, perhaps the idea that the value of the property not increasing commensurately after these expansive plans should.
Benefits and Downsides of Remodeling
Renovating and/or expanding your existing residence can be a great idea. You already own the property so do not need to worry about competing with others for another one; you know your neighbors and get along; your taxes won’t go sky-high by moving and uncapping the current rate; you don’t have to get a new mortgage other than perhaps an equity or renovation loan, so you can keep the lower underlying rate. Other than the mess and disruption of living through a construction project, are there other downsides?
The downsides on taking on a large construction project (or even a smaller scale one) are that it is very easy to spend more than you will recoup in the market. In fact, it is good to go into the project with the expectation that you will NOT recoup your costs, but that you are contemplating the project to take a home that you are beginning to hate and turn it into one that you absolutely love.
After Renovation Value
Do not go into a project expecting it to give you a high return on investment. Logically it makes sense to take a look at the value of your property before the renovations and what it would be worth at the same time with the proposed renovations. This is where a professional appraiser can be your best option in terms of possibly scaling back the plans, or going forward understanding where you stand.
A professional appraiser who knows your market has the ability to both provide a current value, and a value “subject to” the proposed changes. Appraisers approach each problem to be solved in a competent, independent, impartial and objective manner. The appraisal process itself is designed to conclude to an opinion that is logical, and factors in identifying what the problem is the client (you) are trying to solve. There is significant training and experience required to become a certified appraiser. In fact, experience and qualifications for anyone who you hire should be considered as critical, including the architects, designers, and building contractors. Professionals will be eager to provide their qualifications and experience upon request. If you are contemplating any remodeling, approach hiring the professionals with as much care as you would the actual remodel.
Rachel Massey, SRA, AI-RRS, IFA, CDEI is close to a life-long Ann Arbor area resident, attended the Ann Arbor public schools and the University of Michigan, and has a deep level of experience with this market. This knowledge goes beyond the A2 borders into Chelsea, Dexter, Saline, Manchester and Ypsilanti, as well as the lake areas in sourthern Livingston and eastern Jackson and northern Lenawee Counties. Rachel has broad experience with valuation for relocation, lake complexities, and with attorneys, as well as in-depth knowledge of mortgage review processes.