semi-hypothetical home question

[earlyre]

If you were going to be moving in a year or two, and you had a mid 70's house(owned outright) that the Kitchen and baths had never been updated.

would you be better off doing the remodel/update now, hoping to increase the resale/ease of sale,
-or-

just say, eh, Let the next schmuck deal with it.

now some background if anyone's interested:

So my older brother, who's been in TX Since the early-mid 90's, is starting to think seriously about moving back home. no problems with his job (aside from the usual complaining everyone does about their job), in fact, he just got a glowing review, a 3.5% raise, and his Boss agreed to arrange and pay for him to get some certifications he's been lacking,(but already doing the work covered by said certifications) to get his resume up to date with what he's actually been doing.

But as the Parents get older, and our sister's Kids Get bigger... He's realizing how much he's Missing out on, etc.
(he's also what i call "Chronically Single", no wife, no GF, no ex's no kids, etc. Life long Bachelor)

His house was originally built as a HUD House in the 70's, and IF the interior has seen any updates, it was in the early-mid 80's at the latest.

he's Never felt the need to remodel/update the Kitchen & Baths, as everything still works, and works fine for him.

He's Done exterior work, replaced, roof, windows, replaced the Electric Furnace, but is still nursing the 30+yr old central air unit along. etc.

i say, do it. update it, if you spend $20-30k , you can get another $40k+ in the sale, and the folks coming in will be looking at what's already been done, not adding up Dollar signs for work they will have to do (which will probably lower their offer)

Dad says that he(my brother) Just won't do it.

 

[eljefino]

Next schmuck! Absolutely. You'll never get dollar-for-dollar back unless you're a tradesman and get free almost-new stuff ripped out of some yuppie's house.

A new kitchen isn't as bad as a swimming pool though!

There's some real estate blog somewhere that lists improvements and what you get for them; the only real doozy is if you have a ranch house and add a 2nd story it pretty much pays for itself as some family will move in that won't have time for the hassle.

 

[Pop_Rivit]

Kitchens and baths sell homes.

A lot depends upon what else is available in the area, pricing, etc. There are a lot of ways to spruce up kitchens and baths without sinking a lot of money into them. But if all of the competition in the area has updated, high end kitchens and baths, then you'll never sell unless you're way under market price or you're also updated.

 

[dlundblad]

The 2 first posts answered your question. It is a very risky decision that could work either way.

 

[earlyre]

Originally Posted By: Pop_Rivit
Kitchens and baths sell homes.

A lot depends upon what else is available in the area, pricing, etc. There are a lot of ways to spruce up kitchens and baths without sinking a lot of money into them. But if all of the competition in the area has updated, high end kitchens and baths, then you'll never sell unless you're way under market price or you're also updated.


his a a 3 bedroom ranch, 2 car garage, no pool, largest yard in the neighborhood(whole neighborhood built by HUD at the same time), but, the area around his neighborhood, has sprung up with McMansions since he moved in in 97. (he's a couple miles south of Southlake, TX)

 

[spasm3]

Is the home in its current state, priced where first time home buyers could afford it? If so leave it as they would prefer to buy low and are looking for things they can do themselves. If its already out of first time home buyers pricing then it is risky, updating will move it on the market, but you don't get $ for $ back right away. In the second scenario, consider updating just the bathroom, rather than a total update.

 

[JD4440]

Originally Posted By: spasm3
Is the home in its current state, priced where first time home buyers could afford it? If so leave it as they would prefer to buy low and are looking for things they can do themselves. If its already out of first time home buyers pricing then it is risky, updating will move it on the market, but you don't get $ for $ back right away. In the second scenario, consider updating just the bathroom, rather than a total update.

I agree here. But also consult a local realtor

 

[NMBurb02]

You really need help from a realtor to make an informed decision. Have them provide an estimate of the home's value as-is and the value if updates x, y, and z are completed. Calculate how much those improvements will cost and see if you would come out even or on top with the work done. Doing $40k of work to an $80k house does not automatically make it a $120k+ home. There are a lot of things to consider. Doing updates may make it easier to sell and there may be value in that, but how much is that worth and could it be accomplished cheaper, such as by renting furniture for staging?

 

[datech]

If the bath and kitchen are in basically good solid, leak free, etc it very well would make it easier and quicker to sell with a cosmetic makeover like those bath fitters and counter top overlays, maybe new cabinet doors or they can also be refaced, painted, etc. New flooring and basically repaint the entire interior of the house.

This kind of stuff doesn't have to cost much. There are buyers out there that won't consider a house to fix up, they want turn key ready to move in condition.

 

[HM12460]

Originally Posted By: dlundblad
The 2 first posts answered your question. It is a very risky decision that could work either way.








Very much agree with, proceed with caution.

 

[Wolf359]

I'm a real estate broker, but don't know anything about the market you're in. With that said though, there are a few general rules that should still apply. You normally don't do any staging unless it's a high dollar property and it sounds like it's just the normal run of the mill property. Also you normally don't get 100% of what you put in out of the place, but the thing to keep in mind is that if the updates are done, a higher price can be rolled into a mortgage, but if it needs 40k worth of updates, that has to come out of the buyer's pocket and they usually just have enough money to buy the house, you're just reducing demand when a property needs a lot of work. You can do things like minimal updates that won't cost a lot. For instance, you can just re-glaze a tub if it's anything but white. Change out a vanity, put in a new toilet and medicine cabinet. Those are just a few hundred dollars, but if you decide to do the floors and the walls including the tub, then you're talking thousands. He could also paint himself to freshen the place up. Same with the kitchen, new appliances can go a long way to refreshing up a kitchen. You can just do new counter tops and just replace the doors and handles instead of putting in new cabinets. Also light fixtures are cheap if you know how to put them in. As for the heating system, the local utility here has lots of rebates if you replace an old system. What will typically happen is that if you get an offer and then a home inspection, they're going to come back and say the heating system is shot and then want a reduction in the price.

 

[jimbrewer]

I'm guessing that the answer is 'no' don't do it, unless he has the ability to do it himself.

Things like getting the place a fresh coat of paint, and spiffing up the landscaping can be done by him and make the place more saleable.

A real estate broker he's thinking of using could probably tell him the truth. Call on a Tuesday and you might get a few to talk to you.

 

[datech]

There can be a lot of difference in the amount you spend, for example all new ceramic tile vs. peel and stick vinyl over the existing floor.

A house made that long ago probably can use some update, just keep it in line with the neighborhood as that has a lot to do with the price of the house.

 

[earlyre]

we'll be down there for vacation in a couple weeks, and if the topic comes up, i'd like to visit the Local habitat for Humanity ReStore.

if folks aren't familiar, ReStores are owned/operated by your Local Habitat chapter, and they sell donated building supplies, fixtures, appliances, etc.
Basically it's recycling.


as for the house itself, dated wallpaper in the guest bath and kitchen, cabinets could use a "spruce", new/refurbished counters, new/newer-used built-in oven, cooktop, and dishwasher.
and the floors in the common areas are showing 30 years of wear (mixture of Linoleum, carpet, and Parquet Tiles)
Neither Bath has an exhaust fan, so the grout is a little...Dark.. in parts of the tub surround/Master shower stall. ( i try and work on getting rid of the stains each fall when we visit, but by the following October THEY'RE BAAAACK...

 

[cashmoney]

He will have to sell at a discount to the market. If you don't keep your house updated in that area there is no way to get top market value. I live in that area and if it has a really big yard there is some chance it would just get knocked down and new house built. Doing cheap remodel will not help in that area because smart buyers expect tasteful updates with high end finishes. Cheap remodel won't fool anyone in that area, will look cheap and likely be money wasted.

Spend $200-300 getting the house immaculately clean. Paint interior one shade of light neutral color so it looks fresh and clean. Sell at what market will bear for a house that needs full remodel and move on.

 

[eljefino]

Is it in a good school district? With McMansions all around taxes should be cheap and it should move.

 

[Pop_Rivit]

Originally Posted By: earlyre


as for the house itself, dated wallpaper in the guest bath and kitchen, cabinets could use a "spruce", new/refurbished counters, new/newer-used built-in oven, cooktop, and dishwasher.
and the floors in the common areas are showing 30 years of wear (mixture of Linoleum, carpet, and Parquet Tiles)
Neither Bath has an exhaust fan, so the grout is a little...Dark.. in parts of the tub surround/Master shower stall. ( i try and work on getting rid of the stains each fall when we visit, but by the following October THEY'RE BAAAACK...


When I was part of a capital investment group that invested in real estate flipping, we called such properties "investment properties". Because of their tired condition they'd sit on the market for a very long time. If the property was paid off, we often purchased it for a low ball price after it had been sitting 6 months or more. If it was not paid off the sellers were usually so eager to get out from under it that they either took a loss or walked away empty handed. 4-6 weeks later, after bringing in our crews, we'd put the property back on the market. They usually sold within a couple weeks and we walked away with the profit that could have been the original sellers'.

We were the "schmucks" that invested in the properties, turned them, and sold them for a significant profit. In almost every case, if the original owner had been willing to put in a little work, the house would have sold on the regular market. It doesn't take much work to clean them up and make them attractive to regular buyers.

Is there a reason why your brother doesn't take the initiative and do the work himself? Is he handicapped?

 

[supton]

You were the "schmucks" with how many years experience doing this? and with what amount of money in your pocket? and with what tolerance for risk (aka oops didn't make money on that property, well it's a tax writeoff)?

*

I'd be concerned with the snowball effect. You get in there and find other stuff wrong. Wrong framing, wood rot, who knows what. Or other stuff simply ought to be updated too. For instance, you redo the kitchen, then realize you need a bigger breaker box, as you had to add one more circuit to the kitchen. Then you really ought to put in 200A service to the house, as the 100A service is kinda small. Then with those extra circuits you ought to run a couple more to add outlets to some of the bedrooms...

 

[SwampSurvivor]

That is all stuff that would get caught during a home inspection and lower the value of the house anyway, right?

 

[supton]

I dunno. When I had a home inspection he never mentioned anything about "gee, this kitchen looks dated." Various things he did look at. But IMO he missed a critical item (rafter ties) and I'll never forgive his "this house shouldn't give you problems"--not five years later I had the 10 year old roof stripped to deal with ice daming issues that were largely related to lack of proper ventilation. And I still need to reside.

They can't open up the walls, after all. And they are only as good as, well, your own knowledge.