Rethinking Renovations: Home Improvements That Don't Always Pay Off
Rethinking Renovations: Home Improvements That Don't Always Pay Off When it comes to personalizing your living space, the sky's the limit. Whether it’s creating an open-concept kitchen or transforming your backyard into a fruit tree oasis, homeowners enjoy the freedom to make their space uniquely theirs. However, this freedom comes with a caveat—some home improvements may not add the anticipated value to your home, especially when it's time to sell. It's important to distinguish between renovations made for personal enjoyment versus those made with the expectation of increasing home value. While your home should reflect your personal style and needs, certain big-ticket renovations might not yield the return on investment you're hoping for when it comes time to sell. A Closer Look at Renovations with Limited Returns Based on insights from Zillow® and the Remodeling 2023 Cost vs. Value Report, there are several projects that homeowners might want to reconsider if their primary goal is to boost their home's resale value: Converting Kitchens into White Wonderlands: Despite the popularity of bright, all-white kitchens, Zillow research indicates that this choice might actually lower your home's sale price. Darker tones, like charcoal and graphite, are currently more favorable among homebuyers. Adding Walk-in Closets: Though appealing in theory, transforming a small bedroom into a walk-in closet can potentially decrease your home's value. Homebuyers typically prioritize the number of bedrooms. Deck Additions: While a deck can enhance outdoor living, the return on investment is approximately half of the initial cost, making it a less lucrative improvement. Garage Conversions: Converting a garage into additional living space might seem like a good idea, but it could actually compromise your home's value, especially in areas where parking is at a premium. Installing In-ground Pools: Pools may seem like a luxury enhancement, but they can be costly to maintain and may not appeal to all buyers. DIY Projects Gone Wrong: DIY renovations can save money, but poor craftsmanship can detract from your home's appeal and value. Luxurious Bathroom Upgrades: High-end bathroom renovations often do not recoup their costs, with upscale remodels returning only about 37% of investment. Wall-to-Wall Carpeting: Carpeting can make a home feel warmer but is less desirable compared to other flooring options like luxury vinyl, which can slightly increase home value. Bamboo Flooring: Once trendy, bamboo flooring now appears to slightly decrease a home's sale price. Laminate Countertops: Despite being an affordable option, laminate countertops can negatively affect home sale prices. High-End Fixtures: While premium fixtures may be personally satisfying, they're unlikely to be a deciding factor for homebuyers. The Value of Home Maintenance It's also crucial to remember that regular home maintenance can significantly impact your home's value. A well-maintained home can sell for approximately 10% more than a similar home in average condition. Keeping up with tasks like cleaning gutters, resealing grout, and servicing HVAC systems can make a big difference when it's time to sell. Final Thoughts While it's tempting to pursue extensive renovations, it's wise to consider their long-term impact on your home's market value. For those planning to sell, focusing on modest, maintenance-oriented improvements may be the smarter choice. For a detailed look at the renovations that might not add the desired value to your home, we encourage you to visit the original article on Zillow. - - - Jen Holden, Realtor® | Principal The Jen Holden Group of Compass 📱 443.803.7620 (m) | 📞 410.429.7425 (o) ✉️ jen@thejenholdengroup.com 🌐 www.movewithjhg.com
The Dramatic Impact of Homeownership on Net Worth
The Dramatic Impact of Homeownership on Net Worth If you're trying to decide whether to rent or buy a home this year, here's a powerful insight that could give you the clarity and confidence you need to make your decision. Every three years, the Federal Reserve releases the Survey of Consumer Finances (SCF), which compares net worth for homeowners and renters. The latest report shows the average homeowner’s net worth is almost 40X greater than a renter’s (see graph below): One reason a wealth gap exists between renters and homeowners is because when you’re a homeowner, your equity grows as your home appreciates in value and you make your mortgage payment each month. When you own a home, your monthly mortgage payment acts like a form of forced savings, which eventually pays off when you decide to sell. As a renter, you’ll never see a financial return on the money you pay out in rent every month. Ksenia Potapov, Economist at First American, explains it like this: “Renters don’t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments . . .” The Largest Part of Most Homeowner Net Worth Is Their Equity Home equity does more to build the average household’s wealth than anything else. According to data from First American and the Federal Reserve, this holds true across different income levels (see graph below): The blue segment in each bar represents how much of a homeowner's net worth comes from their home equity. Based on this data, it's clear no matter what your income level is, owning a home can really boost your wealth. Nicole Bachaud, Senior Economist at Zillow, shares: “The biggest asset most people are ever going to own is a home. Homeownership is really that financial key that helps unlock stability and wealth preservation across generations.” If you’re ready to start building your net worth, the current real estate market offers several opportunities you should consider. For example, with mortgage rates trending lower lately, your purchasing power may be higher now than it has been in months. And, with more inventory coming to the market, there are more options for you to consider. A local real estate agent can walk you through the opportunities you have today and guide you through the process of finding your ideal home. Bottom Line If you're unsure about whether to rent or buy a home, keep in mind that owning a home can increase your overall wealth in the long run, no matter your income. To discover more about this and the many other benefits of homeownership, let’s connect.
Unlock Savings with The Homestead Tax Credit: Your 2024 Guide
Happy New Year! As we embrace 2024, here's a valuable reminder for Maryland homeowners. In just a few minutes, you can secure a financial benefit that offers both immediate savings and future peace of mind. Yes, we're diving back into the world of property taxes, specifically focusing on the Homestead Exemption. This fantastic tool reduces your home's assessed value, leading to significant savings on property taxes. If you haven't yet, it's time to explore the Maryland Homestead Tax Credit – a not-to-be-missed opportunity for smart savings. Here's your updated guide on applying for the MD Homestead Tax Credit: What is the homestead tax credit? (https://dat.maryland.gov/realproperty/pages/maryland-homestead-tax-credit.aspx) This credit is a cap on how much your property's taxable assessment can increase each year, set at a maximum of 10% or less for each county and municipality in Maryland. For instance, if your home's assessment jumps from $100,000 to $120,000 (a 20% increase), the tax credit caps the increase at 10% or $110,000. This means you're taxed on a lesser value, saving you money. Remember, tax assessments differ from market value. While the state's estimate is for taxation purposes, it doesn't reflect your home's actual market value. Confused about the numbers? I'm here to help with accurate market valuations for selling or refinancing purposes. Eligibility and Application: After your deed is recorded, you'll receive a notification from the State of Maryland about your eligibility. This credit only applies to your primary residence, where you've lived for at least 6 months, including July 1 of the credit year. Verify your deed's record status on the Maryland Land Records site (https://mdlandrec.net/main/), or ask your title company for assistance. Already Applied? Check in two ways: Your property tax reassessment notice should indicate "Homestead Application Approval" status. Visit the MD State Department of Assessments and Taxation website, SDAT (https://sdat.dat.maryland.gov/RealProperty/Pages/default.aspx), search your address, and scroll to "Homestead Application Information". Need to Apply? Download the application form (https://dat.maryland.gov/SDAT%20Forms/Homestead_application.pdf) and mail or fax it to 410-225-9344, or apply online (https://sdathtc.dat.maryland.gov). While processing might take up to a year, once approved, the credit remains effective as long as you own the property. Keep an eye on SDAT for updates, as no direct notification is sent. Don't delay – apply today and ensure your next assessment rise is a reason to smile, not stress. Questions? I'm just a call or email away! 📱 443.803.7620 | ✉️ jen@thejenholdengroup.com Jen Holden, Realtor® | Principal The Jen Holden Group of Compass 📱 443.803.7620 (m) | 📞 410.429.7425 (o) License #639966 ✉️ jen@thejenholdengroup.com 🌐 www.movewithjhg.com
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