Should I renovate for what I can afford, or for what makes sense for the area? The house I'm buying will

Asked by Beth, Providence, RI Sun Dec 28, 2008

need some renovations. It has no appliances and needs upgrades throughout. It's not in the most well off neighborhood and I was wondering if I should keep that in mind when making selections, like skip the granite contertops and so forth, or should I suit my personal tastes?

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Dave Muti, , 07054
Mon Dec 29, 2008
Like the other answers, it depends if an investment property or personal residence. However, even if a personal residence you do not want to over build or put in items that are above the market. The reason is that when you go to eventually sell your house you do not want to be the most expensive or unique home in the neighborhood. You want to fall right in the middle. This way you will have the largest number of potential buyers looking at your home. You can never go wrong staying on the conservative side.
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Lori Rossi, Agent, Warwick, RI
Mon Dec 29, 2008
Beth, I agree with Karen. If you are planning to live in the home, then you should renovate to your own personal taste. Just know that you may not recapture the cost of the upgrades when you sell in the future if you over improve. I am assuming that you got a great deal on the home with it needing renovations, so I wouldn't be too worried about it. Congrats on the new home! Enjoy it!
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David - Appr…, , Maricopa, AZ
Sun Dec 28, 2008
There is such a thing called "over-improvement for the market area". You may want to consult with an appraiser for what type and extent the proposed renovations, improvements, and/or upgrades contribute to the overall value of the property for the market area. The market dictates value. What is acceptable, what is considered an over-improvement or under-improvement in relation to market value for the market area. Renovations, improvements and upgrades do not contribute dollar for dollar in value of a property. To determine how much a renovation, improvement, and/or upgrade contributes to the overall value you need to research the market and apply matched pairs analysis. There are also less expensive materials that can give the appearance of higher quality finishes such as imitation granite counter tops, tile or hard wood flooring, etc. Consulting with an appraiser can also help determine any functional and/or external obsolescense that may need to be addressed.
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Karen Hurst, Agent, Warwick, RI
Sun Dec 28, 2008
It all depends on whether you personally are living there or not. If you are living there (and plan to stay) then definitely go with your personal taste. Your home is your haven! However, if you are buying as an investment and either going to rent or sell, then go with serviceable and attractive. Keep in mind, if you are selling, that even though you may like the granite countertops, someone else may not.
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