Do Renovations Really Increase Value?

 

The short answer is not what you want to hear… “SOMETIMES”…

Now TV shows and, oftentimes Realtors, or others will tell you to invest your money into your kitchen and bathrooms. And, though I would agree, updating a kitchen and/or bathroom will certainly increase marketability. As an appraiser, I cannot say it will ALWAYS result in a higher sales price for you. Therefore, I am vague when you ask me. You may think because I am vague, I don’t really know my stuff. Appraisal is a science after all, is it not? Appraisers should know how much value each item adds, shouldn’t they? My answer is: “It’s not that simple”. And here’s why…

Appraisers are tasked with proving that value in the market for your property, and each appraisal is a unique assignment. Each appraisal has one subject property, in a unique location, with its own GLA, a certain bedroom and bathroom count, was built by a certain builder and to a certain quality level. Each property was built in a certain year and may (or may not) have been updated. Each property owner has cared for their properties in their own way. Each neighborhood can behave differently. Each seller will act in their own accord when they close on the sale of a property. In the market, you have your typical run-of-the-mill homeowners, banks, investors, estate sales, etc. So, the data we pull for each assignment is (by definition) unique. There is no single value for updated kitchens, bathrooms, roofs, HVAC, pools, or that $20,000 outdoor kitchen you installed.