Keep Up with the Joneses: But Don’t Overshadow Them
Have you ever driven through a neighborhood full of cute little bungalows only to suddenly come across a 7 bedroom, stucco home with a Spanish tiled room and a three car garage? “What the…” is probably your first thought. Eventually, you get around to admitting the house really is gorgeous...just not in that neighborhood.
That reaction is a perfect example for why you need to make sure your renovations are line with the rest of the neighborhood.
Buyers are going to feel the same way. Especially if they like the neighborhood for the charm and personality. They’re also going to be hesitant to pay that much for a home when all their neighbors’ homes cost a lot less.
The value of a home is determined in large part by the comparables in that neighborhood. If your home is a lot larger than other homes, or has more high end renovations, you might not see the same value as if you made the same additions and improvements in another neighborhood.
The opposite can be true, too. If yours is the only house that still has a one-car garage and a 70’s kitchen, potential buyers are probably going to pass it up. Or at least try to negotiate a lower price to make up for the renovations they’ll have to do.
Then again, if most of the homes in your neighborhood are larger, and you live in a small home on a large piece of property, you might do really well when you try to sell. The value of your land in a sought after neighborhood can be a big draw to buyers.
But what if you really want a pool, even though no one else has one? And you know you and your family would use and enjoy it a lot. It may still be worth doing, just don't go in with blinders on.
Remember that you may not get that investment back when you sell your home. So take a look around, chat with your neighbors, or go to some open houses before you make any final decisions on major remodeling projects. That way you can plan the projects that will add the most value to your home.