One of the common questions I get is from homeowners who want to upgrade their home for both their own enjoyment and the future resale value. They do have a caveat, however, that they are also considering moving at some point in the near-to-mid future. Their question stems from the idea that they want to enjoy their home while they’re living there, but they don’t want to spend money on something they won’t get a return out of. So today, let’s dive into this topic and address when it makes sense, and when it doesn’t. We’ll also help you find that happy medium so you can benefit from both the enjoyment and the enhanced resale, without going overboard.
Anytime I am asked whether someone should upgrade their home (myself included), I start from the belief that your home should be the place you feel comfortable and happy. Enjoyment value is, to me, more important than the resale value… as long as that’s understood when you write the check. That being said, there is still a line to draw so that you don’t break the bank on something that you’ll only get to enjoy for a small amount of time, especially if you know that in advance.
So, let’s start with the most common upgrades people ask about. Typically, people are asking about kitchens & bathrooms, fireplace walls, flooring, and sometimes even adding a pool. These certainly bring the most enjoyment, but are often the most expensive upgrades. Remodeling a kitchen or adding a pool can cost upwards of $100k or more, and bathrooms and flooring can easily cost up to $20k or $30k. Spending that kind of money when you’re even considering selling in a matter of a few years is not a wise investment, as you will almost certainly not make that money back when it comes time to sell. This is where you have to ask yourself if the potentially short-term enjoyment value is worth that significant of an expense. In almost every case, if you sell within a couple of years, you will not recoup your investment.
Now, if you’re talking about something like a fireplace wall, which might cost $10k, the math gets a bit easier to absorb. You will surely enjoy it, and it will make your home stand out from the competition when you go to sell it. You may even make some or most of that money back. You can upgrade your kitchen & bathrooms without doing a full remodel. You still enhance your experience while adding value, such as painted instead of new cabinets, a tile backsplash, new fixtures, and even moderately priced countertops. These upgrades are far less expensive and will make your home stand out. Sometimes, “updated” matters more than “remodeled”. Flooring doesn’t have to be top-of-the-line to be nice, and it will definitely help with resale. So, find something nice… not “cheap”, but don’t go top-of-the-line.
So let’s wrap this up with a good rule of thumb: If you think you’re going to sell your home within 1-2 years, the answer will almost always be no; you should not spend the money to upgrade. If you’re going to be there 2-3 years, then maybe, depending on the cost. And if you think you’re going to be in your home for 3-5 years, I think you should do what will make you happy and truly enjoy the place you call home, while still being mindful of how much you spend. If you would like to learn more and dive a bit deeper, please consider watching the video linked above, and we’ll discuss it in further detail. If you’re considering making some updates and aren’t sure if it makes sense for you, please give me a call, and we can talk about your ideas and help you come up with a plan!