need advice ...ROI on Home upgrades / features

My sister lives in the SF bay Area, CA. She wants to upgrade her home
with new kitchen granite,
flooring, carpeting, bathroom tiles, marble entryway, additional new
bathroom etc

She is wondering if "the upgrades" are a good investment ? and will
they appreciate in time ?
In other words if she is planning on spending $50,000 on upgrades, will
this $50,000 appreciate at say 6% or would she better off investing
in mutual funds ?

I have 2 important questions...
1.generally does get one's money back from these upgrades ?
2. Do the upgrades appreciate with the home ? ie if a home appreciates
6% a year in the SF Bay Area, CA would her upgrades appreciate as well
?

If you think this would bring in a good ROI, would you pls advise as to
which materials to use ?
What tiles, carpets, marble, granite are best for ROI and maintenance
?

She is totally ignorant with these things.

Any help would be highly appreciated.

Thanks
Kim

writes:
need advice ...ROI on Home upgrades / features

My sister lives in the SF bay Area, CA. She wants to upgrade her home
with new kitchen granite,
flooring, carpeting, bathroom tiles, marble entryway, additional new
bathroom etc

She is wondering if "the upgrades" are a good investment ? and will
they appreciate in time ?

Depends on when she intends to sell. In general, I'd say no, these
are not things to think of in terms of investment/appreciation.

However, they are things that will add to the value of the home and
you get the benefit of enjoying them while you're in the home.

In other words if she is planning on spending $50,000 on upgrades, will
this $50,000 appreciate at say 6% or would she better off investing
in mutual funds ?

If $ take out is the concern, traditional investment vehicles are
probably a safer bet, and then using that appreciated money to buy
improvements that will be in style and "hot" at the time of sale in
the future would be better.

That said, however, the natural stuff like granite and marble if
chosen in neutrals may not go out of style ,but you never know.


I have 2 important questions...
1.generally does get one's money back from these upgrades ?

General wisdom is that you tend to get back what you spend in kitchens
and bathrooms if updating them near the time of sale.

2. Do the upgrades appreciate with the home ? ie if a home appreciates
6% a year in the SF Bay Area, CA would her upgrades appreciate as well
?

Depends on her taste. :-) UPgrades done with polarizingly bad taste
won't help her case on the sale end, for instance.

Carpet updates... they have to be done before a sale certainly, but
whether the carpet will still be "in" and in good shape when she goes
to sell is not a sure bet. Natural materials such as hardwood,
quality granite and such I'd say will be in style for a while. I'm
holding my breath as to when the stainless steel and black craze will
give way to colors again.

If you think this would bring in a good ROI, would you pls advise as to
which materials to use ?
What tiles, carpets, marble, granite are best for ROI and maintenance
?

I think discussions of these things have to weigh in the value of
appreciating the upgrade while you're in the home and not entirely
looked at in terms of fiscal sense. In a home I recently sold, I
replaced carpet, and and did a number of things in prep for sale that
once done I felt "damn, why didn't I do that sooner so I could enjoy
how nice that looks?"

In my current home, I went ahead and did such things straight away.


--
Todd H.
http://www.toddh.net/

writes:

My sister lives in the SF bay Area, CA. She wants to upgrade her home
with new kitchen granite,
flooring, carpeting, bathroom tiles, marble entryway, additional new
bathroom etc

She is wondering if "the upgrades" are a good investment ? and will
they appreciate in time ?
In other words if she is planning on spending $50,000 on upgrades, will
this $50,000 appreciate at say 6% or would she better off investing
in mutual funds ?

I have 2 important questions...
1.generally does get one's money back from these upgrades ?
2. Do the upgrades appreciate with the home ? ie if a home appreciates
6% a year in the SF Bay Area, CA would her upgrades appreciate as well
?

In general, the answer is "no" -- you never get back the full value of
home improvements in terms of increased value of the home. Seems like
I remember seeing some tables somewhere of the expected return of
various upgrades, and the highest one was a bathroom update at about
80%. So, there are really two reasons to fix up your house: (1) so
you can enjoy the upgrades while you are living there yourself or (2)
to fix obvious "problems" with the house before you sell it to make it
more attractive to buyers. Category (2) stuff is usually either
big-ticket maintenance items that might scare off a potential buyer
(does the roof or heating system need to be replaced soon?) or
relatively cosmetic issues like painting that increase the house's
"curb appeal".

-Sandra

(Todd H.) wrote:

General wisdom is that you tend to get back what you spend in kitchens
and bathrooms if updating them near the time of sale.

I would qualify that by saying that you cannot exceed the standards of the
neighborhood. If you are on a shabby street and put in a $25K kitchen, you
aren't going to get it back.

In article .com,
says...

need advice ...ROI on Home upgrades / features

My sister lives in the SF bay Area, CA. She wants to upgrade her home
with new kitchen granite,
flooring, carpeting, bathroom tiles, marble entryway, additional new
bathroom etc

She is wondering if "the upgrades" are a good investment ? and will
they appreciate in time ?
In other words if she is planning on spending $50,000 on upgrades, will
this $50,000 appreciate at say 6% or would she better off investing
in mutual funds ?

I have 2 important questions...
1.generally does get one's money back from these upgrades ?
2. Do the upgrades appreciate with the home ? ie if a home appreciates
6% a year in the SF Bay Area, CA would her upgrades appreciate as well
?

If you think this would bring in a good ROI, would you pls advise as to
which materials to use ?
What tiles, carpets, marble, granite are best for ROI and maintenance
?

She is totally ignorant with these things.

Any help would be highly appreciated.


I think the most important questions are - how long will she be in the home (how
soon she's planning to sell if she is), and to which upgrades and to what extent
they would increase her enjoyment and use of her home. Also - how is the
current state? Is it not to her taste and/or old (not necessarily the same
thing)? Are things functional?

Let's say just as an example she'll be there five years, and is looking to sell
then and "trade up", and has some rooms that she finds hard to live in (not as
functional/not to her taste). Then I'd concentrate on the kitchen and bathroom
upgrades, using middle of the line natural materials in neutral colors.
Windows/roof/siding if there are problems due to age. Any trim should be either
stained a medium stain throughout or painted an off-white or ivory throughout.

Tile is great in areas where people expect them (as far as ROI) - kitchen floor
and wall, bathroom, entryways. Not so great where people don't - including
family/living rooms unless that's the norm for her area.

She should be observant as to what the style/expectations are in her area.

But, really, IMO houses are for the living, and not for the leaving
(resale/investment). Unless one really is into the purchase/live and fix/trade
up scenario. Even then, she should think about what she would enjoy living in.

Banty