How Do Additions To Your Home Affect Its Value?
We’ve had people lately ask how handicapped facilities in their home would affect its value. And with housing prices tanking lately, it’s no wonder that homeowners would like an advanced warning of what is and isn’t good when it comes to home renovations.
One person is especially concerned. He is already upside-down on his mortgage but has kept paying his mortgage on time each month. He now is in a position where he needs to move his mother in. His mother has had a severe stroke, is now wheelchair-bound, and needs a specially designed bathroom and a few renovations in the kitchen. All doorways in the house need to be widened, and he is going to install a chair lift – a chair that will take his mother up and down the stairs with a push of a button.
However, he was hoping that in a few years he would be able to sell the house, buy a bigger one, and move closer to the rest of his family up in New York. “What will this do to the value of my home?” he wanted to know. These types of improvements are the same as adding a pool. Some people will love it, other buyers won’t even consider the property because they don’t like pools or their liability.
Handicapped access homes are no different.
In order to perform these renovations, substantial costs are incurred, and substantial damage is done to the structure. You can’t just rip out handles on a handicapped bathtub, you can’t rip up a wheelchair ramp, and you can’t just fix doorways without equally substantial sums of money.
Most buyers don’t want to do this. It’s a rare family who might be looking for this type of accommodation. The trick is that there is no standard method when it comes to home appraisals for houses with these types of “improvements”. And, as anyone who has ever bought or sold real estate knows, the appraisal is the decision-maker when it comes to who can and can’t buy a home.
With that said, many appraisers are forced into making educated guesses when it comes to a home’s value after these renovations are done.
Regular “comps” are impossible.
The chances of finding a comparably equipped handicapped access home within a few miles are about nil. Appraisals might be so off base that banks will refuse to lend money on the property. However, there’s always the chance that there’s one unique buyer out there looking for exactly what you have to offer. If the final selling price on your house is important, and why shouldn’t it be? Then you need to market this type of home to the appropriate target group – which means forget the local real estate agents.
When the time comes, place ads in veterans’ magazines and newspapers and on websites. Advertise nationally, not just locally. Many veterans would love a nice home that has already been updated to include the handicapped facilities they have come to need. As with anything, a home is worth what someone will pay. If you find the right buyer, your home may be more valuable to him than you had thought.
Also, contact hospitals and rehab facilities. Many newly handicapped individuals will be forced to look for suitable accommodations that will allow them to adapt to their physical limitations.
So, should you be afraid to make these renovations because you are worried about your home value in the future? No. Make the renovations, check out the current tax credits available, and then market it to the individuals who would be the most likely buyers when you want to sell.