Jan
28
2008
Cost Versus Value in the Northwest
By Charles TurnerIn previous posts and comments there has been some idle chatter about the least sexy way to spend money on your home. Sewers, storage tanks, etc. top the list. Some of the more profitable ways of spending follow in the graphic. Very few return 100% either in the national market or in the Northwest.
The graphic was part of the Prudential Northwest Properties Quarterly newsletter that came out this morning.
I note that the repairs listed are elective, generally speaking.
Some of the repairs we have discussed in the past were not:
Sewer repair: $10,000
Oil Tank Removal: $$$$$$$
Value Added:
I would suggest that the cost of either the sewer repair and oil tank removal add about 100% to the property–the true value didn’t reflect the underlying property. In other words, the fair market value is comprised of two components: Market value = The value of the repair (at essentially 100%) PLUS the fair market value after discovery but before repair. The drop in market value happens on discovery of a defect, and cost of repair of the defect brings it back to market value.
This article is incorrect. I watch HGTV all the time and the Realtors say that by remodeling the bathroom it pays 150% of investment. Same for kitchen 150%. I consider it to be a highly reliable source of factual information.
Bold statement. I’m not sure that I would put HDTV over NAR or vice versa as a more reliable source for solid information. Cost versus value is subjective at best. Buyer may hate your kitchen remodel and plan to gut it: cost versus value = zero. Or it could go the other way.
“Buyer may hate your kitchen remodel and plan to gut it”
Funny you say that. I had a friend who purchased a decent home, and the seller kept telling him how great the place was. Within a month after purchase he let the local fire department burn it down for practice. All he wanted was the land. He built a much nicer place, and the former owner was horrified.
Screw the backyard, I’m decking in the whole thing!
How are these numbers calculated anyway? You can have theoretical formulas but in reality a property can only be sold 1x. 150% per hgtv, ya right. Go watch some more tv!