Home Improvement: Cost vs Value

Everything you do, and don’t do, to your real estate can affect its value somehow. This principle makes it imperative that home owners have a sense of awareness about how their home’s value will change when they decide on, or decide to forego, home improvement projects.

One of the many long term perks of masonry construction is the lifespan of the materials. Well installed masonary materials have an incredibly long lifespan compared to wooden, or newer composite materials.

The lifespan is important to appraisal value, for example:
Home Owner A

• Installs poured concrete walkway
• Lifespan of material 75 years
• Total cost $4,000

Home Owner B

• Installs concrete paver walkway
• Lifespan of material 15 years
• Total cost $2,000

Both home owners maintain their walkways in a sufficient manner and in 10 years both decide they want to retire to a sunnier climate. Who can blame them!

Anyway, here is what happens at home appraisal time when the walkways are considered:

Home Owner A

• Lifespan left on walkway = 87%
• Current value of walkway = $4,000 x 87% = $3,480
• Loss on investment = $520

Home Owner B

• Lifespan left on walkway = 32%
• Current value of walkway = $2,000 x 32% = $640
• Loss on investment = $1,360

In all likelihood Home Owner B may need to replace the walkway, to satisfy potential buyers, since it would be so close to the end of its lifespan.

Now, here is another possible scenario:

Home Owner A

• Installs poured concrete walkway
  
• Lifespan of material 75 years
• Total cost $4,000

Home Owner C likes Home Owner A’s walkway but finds a less expensive ‘deal’:

• Installs poured concrete walkway with less expensive company
• Lifespan of material should be 75 years, but, corners are cut in installation to make up for the price so it is actually 20 years
• Total cost $3,000

Again, both home owners maintain their walkways in a sufficient manner and in 10 years both decide they want to retire to a sunnier climate.

Home Owner A

• Lifespan left on walkway = 87%
• Current value of walkway = $4,000 x 87% = $3,480
• Loss on investment = $520

Home Owner C

• Lifespan left on walkway = 50%
• Current value of walkway = $3,000 x 50% = $1,500
• Loss on investment = $1,500

While the initial project budgets are different, in both scenarios the loss on the investment is greater when insufficient materials and installation methods are used. 

Careful spending on your home improvement projects will benefit you greatly in the years to come.

​Have a project idea? Contact us!