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These home renovations tend to not pay back your investment.

Home investors have to walk a very thin line in their prospecting and repairing.  They want to find a home that others have ignored due to necessary repairs and updating.  However, they don’t want to waste money on improvements that simply look nice but fail to increase the home’s overall price.  Here are the top renovations that do not add much value to the home.

Grandiose Landscaping

Potential buyers will appreciate a well-kept lawn and may be somewhat attracted to a nice flower bed by the front door, but elaborate landscaping will not add to the home’s price.  Even worse, if the prospective buyer has no inclination to spend hours in the yard weeding, fertilizing and replanting then you may actually scare off a few buyers.  A simple lawn with low maintenance bushes are the best bet for most homes.

Pool

A new pool is extremely expensive and you may not recover even half of your investment when the property sells.  The average home buyer looks at the pool as a major expense and a potential problem in the form of injury or a lawsuit.  Some contracts in recent years have actually been structured to include filling in the pool with dirt and sod just to avoid potential problems.

Carpet throughout the Whole Home

It can be rather expensive to replace the carpet in an entire home.  Additionally, styles and preferences change over the course of time and homeowners may wish to have a more updated look in the home.  The need to replace a large amount of carpet sometime in the next 3-5 years would likely be daunting for most homeowners.  A better bet is to have hardwood and tile in the home.  They are easier to clean and most people appreciate the simple upkeep. Although the initial investment in hardwood or tile is more expensive, you are more likely to get a greater amount back when you sell the home.

More Home than the Rest of the Neighborhood

One of the fundamental basics of flipping homes is to search for a property that conforms to the neighborhood.  Never buy the absolute biggest home or the smallest home in the neighborhood.  They will be harder to sell.  Along the same thought process, never add more to a home that will make it vastly different from the neighborhood.  If all the properties on the street are single story homes then it makes no sense to tack on a double story addition.  Stick with the norm for the neighborhood in order to be able to move the property quickly.

Expensive Cosmetic Features

Some people like to brag about the Italian tile in the kitchen or the gold chandelier in the dining room when they are working on a remodel.  However, these expensive items add little to the value of the home.  It is better to make sure the home has plenty of lighting, has ample space and that the closets and cabinets are well organized.  Those expensive add-ons can be purchased by the next owner.

Basically, the best improvements you can make to an investment home are the ones that add function and space.  Anything else will simply be for show and potentially cost you too much in the long run.

Home Prices in Wisconsin are Stabilizing

Amidst the turmoil and problems of the year, there was some good news about Wisconsin home values in the year 2011; prices have stabilized. Based on a year-end report conducted by the Wisconsin Realtors® Association (WRA), the number of homes sold was slightly better than for the year 2010. And the price drop from 2010 to 2011 has been minor, signaling that we may have found the bottom of the price bubble.

Not Unexpected

However, this trend is not a surprise to seasoned real estate agents. The Federal Homebuyer credit that was so popular during the year 2010 was projected to have a negative impact on the first six months of 2011. This prediction came true. Even more importantly, the latter half of 2011 saw a strong increase in home sales that were higher than the same point from 2010.

Small Signs of Economic Improvement

The best news is the fact that the number of homes selling has increased. While different parts of Wisconsin have seen varying degrees of improvement, the entire state has benefitted from improvements made in the economy. While government has shown a loss in jobs, the private sector is increasing enough in new jobs to offset the government loss. This has led to a drop in the total state unemployment number, down from 7.6% to 7.1%

Lower Prices Main Reason for More Sales

Obviously, when the price of goods drops it usually signals more buying from consumers. The same is true for homes across Wisconsin. Historically low mortgage rates, paired with lower home prices, have enabled more families to buy that first elusive home. While the average home price is roughly 25% to 30% lower today than it was in 2006, the recent trends are promising. Prices will rise with increased demand. As long as unemployment continues to drop and people continue to purchase homes, the prices will eventually rise again.

Everything moves in Cycles

Keep in mind that the state economy is like a giant organism. When something affects one part, another part is affected as well. Case in point, apartments are beginning to see a good recovery. A large number of people have chosen to rent a place for the short term while they make their plans to buy a home. As this trend continues, the price to rent an apartment or single family home will rise. When the price to rent becomes higher than the monthly payment on a typical mortgage, more people will look to purchase a home.

The last few years have been tough on a lot of people. Loss of jobs, drop in home prices and a general feeling of despair have been quite common. However, times are improving, if only slightly. Now is the time to get our financial houses in order and push forward to take advantage of the great home ownership opportunities that lie before us.

Original Post - Home Prices in Wisconsin are Stabilizing