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  • Writer's pictureJesse Ledbetter doesn't know what "increase" means.

In a recent article Homelight offers 9 "renovations" that will "increase" your "home value." Why are all of those in quotes... because I'm not sure the author knows what any of those phrases actually mean. Below I'll address the worst instances and offer suggestions.

1. Boost your curb appeal - I've never heard a real estate professional refer to the spreading of mulch, planting of bushes, or painting as a "renovation." Stricly the definition being "restore (something old, especially a building) to a good state of repair," loosely fits, but it reads like someone who has never participated in real estate.

Further, the article claims that "their agents" report a 238% ROI. Up to what level? In what areas? Based on what? The linked report claims that basic yard care (freshly mowed, fertilized and weed controlled) which they estimate as costing $340 would return $1,832.60. Based on what? For what sized lawn? Anyone with a lawn care service will immediately laugh at these numbers of course.

2. Create a more functional floor plan - the article goes on to claim that finishing unfinished space has a 70% ROI. So, for every $1 you spend, you lose $.30. This is the crux of the title of this blog is about. While yes, it will increase your home's value, it will not put money in your pocket.

6. Expand your outdoor space - here, they list the information from CoreLogic that pools add 7% to the value of a home. This is an errant way to view the data. First, as discussed on this blog before, the cost new of a pool is immediately depreciated by at least half in the Virginia area due to the fact that this amenity is only usable half the year (assuming you have tough skin). Second, it would be more appropriate to say that the type of home that has a pool is typically more expensive than other homes in the same market. In other words, these homes are on larger lots, the owners tend to have higher incomes (because pools are expensive money pits that you keep throwing money in) and therefore purchase more expensive homes.

The article ends with a very wise paragraph that I'll quote here:

Not every renovation project will increase your home value. Focus on the current trends and functionality to pick renovations that will not only help you but build value in your home. Keeping pace with what buyers like and what can increase your resale value can help you decide where to focus your efforts.

Really, the entire article needs to be read with this in mind. I've pointed out the most egregious errors in the article, but there are many others (make your mud room bigger? "Hot tubs add value"... hot tubs are personal property and not included in the sale of real estate, etc). Finding what the typical house in your market looks like and using that as a guide is your biggest tool in seeing higher ROI. Beyond this, consult a real estate appraiser to see what market impact there is for your potential "renovations."

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