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Massachusetts home improvements

Home Improvements With The Worst Return On Investment

by Bill Gassett on June 14, 2010 · 9 comments

Home improvements with the worst return

One thing I have learned over the years while working as a Massachusetts Realtor is that many folks do not realize the correlation between making improvements to their home and what the corresponding return on investment will end up being.

So many people blindly assume that every improvement they make to their home will bring an automatic 100% return or close to it. Unfortunately this is not the case…far from it. One of the best home improvements you can make to your home is a remodeled kitchen and that generally only brings a 75% return!

I don’t know how many times over the years that I have done an evaluation on a sellers home and they were disappointed to find out the value was not quite what they expected. More often than not it can be traced to the fact that money was put into the home in places where there is a very low return.

So what are some of the worst returning investments in a home?

Swimming pools

Let me 1st preface by saying that adding a swimming pool somewhere other than Massachusetts may add more value in a home. In Massachusetts the time you are able to truly enjoy the use of a swimming pool is around three months. The weather in the New England states in not the same as down south or out west in the Arizona area where temperatures remain much warmer for a larger part of the year.

Swimming pools are generally far more expensive to install in Massachusetts because of our rocky soils. The cost of an in-ground swimming pool can vary quite a bit depending on the size and whether it is a gunite or liner pool. On the lower end your very basic liner pool is going to cost around $40,000 by the time your figure the cost of the pool, fencing, landscaping, etc. A luxury swimming pool can easily go upwards of $100,000 if you go all out with a nice design and frills such as a cabana, fireplace and fancy surfaces around the pool.

When you install a swimming pool in Massachusetts what you really should be thinking about is the enjoyment you are going  to get out of having it. Do not expect that you will be getting a good return on your investment. Swimming pools often times can actually end up being a detriment when selling a home. There are many buyers that flat out will not buy a home that has one no matter how beautiful it is.

Are there times where a buyer is specifically looking for a pool? Sure…if you are lucky you may find a buyer that will pay a little more for a home with a pool. Just don’t expect that it will be anywhere close to the money you have sunk into the ground.

A new septic system

New Massachusetts septic system

While you would never hear a couple saying “hey honey what do you think about getting ourselves a beautiful new septic system?”, the fact of the matter is that many home owners incorrectly assume that a buyer will give you something because you have one. Fat chance!

Replacing a septic system is really one of the worst nightmares a home owner can face. The cost involved with installing a new title V system can put a huge dent in your wallet. The cost of replacing a Massachusetts septic system can vary quite a bit depending on the soils and the ground water level. If there are tough soil conditions and a high water table you could be shelling out $40,000 – $50,000 or more to have a new system installed.

Even if the soil conditions and water table are very favorable you could still expect to be handed a bill of around $10,000. There is no question that replacing a septic system is a huge investment. Replacing a septic system is obviously not something you run out and do because you just feel like it. If your system fails it is a fact of life that it must be replaced. In Massachusetts you can not sell a home without a passing Title V!

The problem is a buyer could care less if you have a new system in the ground. All a buyer is going to care about is when the toilet flushes it works.  Do not expect a buyer to pay for your septic problem! You will be lucky if you get the buyer to pay 10%-20% of the cost of installing a new system.

A new roof

There is no question that one of the major components a buyer cares about when purchasing a home is the roof and basement. Of course this stems from the fact buyers never want to think about having a water issue. Surprisingly though home buyers do not care if you have a beautiful new architectural shingle adorning your rooftop.

As an example lets take two identical homes in the same neighborhood one with a twenty year old roof approaching the end of it’s useful life and another home with a new roof. Let’s also assume the new roof  would cost the seller $12,000 to replace. Don’t expect the buyer to pay an additional $12,000 for the home. Buyer’s rarely ever pay for the mundane. Buyer’s are far more willing to pay extra for things they can enjoy on a daily basis. A new roof is not one of them. A gorgeous new bath….different story!

There is no question that a swimming pool, septic system and roof are three of the worst home improvements for return on investment in a home. What are some of the others? According to the latest cost vs value remodeling report for the Northeast here are a few more home improvements that do not fair well when it comes time to sell:

  • A bathroom addition which comes in at a return of 59.5%
  • A home office remodel which returns 48.1% on investment.
  • A master suite addition which comes in at 65.2%
  • A deck addition also has a low return at 60.8%

When it comes time to sell your Massachusetts home remember that some of the improvements you have made may help the saleability of your property but not your bottom line!

Related Real Estate articles:

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About the author: The above Real Estate information on home improvements with the worst return on investment was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.

Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service the following towns in Metrowest MA: Hopkinton, Milford, Southboro, Westboro, Ashland, Holliston, Upton, Mendon, Hopedale, Medway, Franklin, Framingham, Grafton, Northbridge, Shrewsbury, Northboro, Bellingham, Uxbridge, and Douglas.

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Should I Move or Improve My Massachusetts Home?

by Bill Gassett on June 2, 2010 · 3 comments

Massachusetts Building Contractors

As a Massachusetts Realtor getting asked the question should I move to another home or improve on my existing home is something I hear fairly often.

The answer to this question often depends on each individual home owners circumstances.

Massachusetts home improvements are cheaper

There is no question that now is a great time to remodel a home in Massachusetts for a number of reasons. The 1st being the cost of a number of building products are down substantially from where they were just a few short years ago. Framing lumber, plywood and drywall are all down by a significant amount.

The labor force for the home building industry has also been devastated with the economic downturn. There are so many building contractors that used to be swamped with work that are finding it hard just to remain busy. The construction industry has been one of the hardest hit in Massachusetts especially out in the Metrowest area.

This environment has made it very difficult for contractors. Some contractors are so desperate for work they are seriously under bidding the value of the job just to remain working. Of course this is good news for home owners as they are able to take advantage of the lowered pricing scale.

Another benefit to the weakness in the building trades is most home owners will not have to wait months for a contractor to show up. The way things are you will probably be able to get a contractor to show up in a matter of days instead of weeks.

Will I be over improving my Massachusetts home?

The question remains though on whether or not the home improvements you would like to make are fiscally responsible. One of the key factors on deciding whether an addition or large improvement makes more sense than moving depends on the neighborhood in which you are located. In other words does the neighborhood support the improvement you are thinking of making?

As an example if you live in a neighborhood where all the homes are around 2000 square feet and you would like to add a 500 square foot “great room” addition this could add a substantial amount of cost to your home. You would now be the big dog in the neighborhood which is a situation that you usually want to avoid in Real Estate. The rest of the smaller homes in the neighborhood will ultimately bring the value of your home down.

This situation could be completely different, however, if there were other larger homes in the neighborhood to support such a big addition.This where the neighborhood and the homes around you become a substantial factor in the decision making process.

Another thing to consider is whether or not the addition would create  functional obsolescence. Using the “great room” addition again as an example, lets say you owned a three bedroom 1.5 bath colonial. Would the cost of the addition be an over improvement because you would still have a three bedroom, 1.5 bath home and the homes you would be competing against at the same price point when you got to sell are four bedrooms and 2.5 baths?

I have seen on many occasions where Metrowest Massachusetts home owners have made this mistake and it has cost them big time. For instance a common example is the owner that makes their current three bedroom home into four bedrooms by adding a substantial 2nd floor addition. The problem is they have no made their home “top heavy” The upstairs is very spacious yet the kitchen and family room are still on the small side and don’t match the overall square footage.

In this instance the owner could have been better off at buying an existing four bedroom home with more size in the key areas where most buyers demand it.

Over improving would be something you would want to avoid and certainly could be reason enough to consider moving instead of making the home improvement.

The case for moving

Moving in Massachusetts

Now is a great time to upgrade to another home for a few reasons. The cost of money is very cheap! Interest rates are near all time lows and allow you to finance a larger amount amount of money for far less than you were able to a few years ago. You might be able to get a larger mortgage for close the same monthly payment you have now if you have not refinanced recently.

In the Metrowest Massachusetts area the value of homes in some communities have dropped by 20-25% from the high water mark in 2005. While the value of your current home has also dropped if you are moving up in the market you will reap the benefits of buying a home that has dropped by a larger amount. In other words if your home was worth $400,000 in 2005 and it dropped in value by 20% it is now worth $320,000 which is a loss of $80,000. The home that was valued at $600,000 in the same year would be worth $120,000 less or $480,000. As you can see there is a difference of $40,000!

Don’t forget quality of life aspects

While the financial aspects of making a move or not should be strongly considered don’t forget the quality of life afforded by home ownership!

Sometimes the thought of whether to move or improve your Massachusetts home should be decided by the things you cannot change about your current property. Things like the amount of traffic on your street, the size of your lot and usability of the yard, how long your commute is to work,  your neighborhood quality of life, the school district and the ease in which you get to major traffic routes and shopping. If you love  where you are then improving may make more sense. Just make sure you make the right improvements.

If a different location would be an improvement before you even talk about the new home then trading up could be the way to go!

Related Real Estate articles:

Staging a Massachusetts home

Sell a Massachusetts home in 70 days

Handling offers selling a Massachusetts home

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About the author: The above Real Estate information on should I move or improve my Massachusetts home was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.

Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service the following towns in Metrowest MA: Hopkinton, Milford, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Franklin, Framingham, Upton, Grafton, Northbridge, Shrewsbury, Northboro, Bellingham, Uxbridge, and Douglas.

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