Home Renovators, Mind The Price Ceiling
So you’re going to do it. You’re finally going to finish out that basement. While you’re at it, you might as well replace all the kitchen cabinets, right? And add an island? Oh heck, replace the windows too. All that hard work, you deserve to cool off in a backyard swimming pool.
Whoa! Snap out of it, homeowner! Did you not watch HGTV’s “My House is Worth What?!” last night? Clearly not, or you’d know you need to tone down those power tools. The show featured a couple in Maine who had added onto their house over the years in an exclusive neighborhood community that prides itself on preserving the historical lay of the land. In other words, you can’t spit and hit your neighbor. It’s a lovely, spread-out landscape and their house has oodles of curb appeal, but one thing quickly becomes apparent. This couple’s house is easily the biggest around.
In this case, not a major thing because the neighborhood was so prestigious and the couple had done a fabulous job of updating the kitchen and seamlessly adding on a second story. But generally speaking, you really don’t want to own the biggest house on the block. It has to do with the neighborhood “price ceiling” — i.e. the neighborhood’s average listing price, which bears directly on your home’s value.
Using aquatic life as a metaphor because I’m hungry and it’s dinnertime, you want to be a goldfish or maybe a small-mouth bass in a lake. You do not want to be the crocodile in the lake. Because when it’s time to sell the crocodile, you could lose money on the crocodile. All the surrounding smaller aquatic beings will cramp the crocodile’s style and resale value. Does that make sense?
So stop! For the love of Black and Decker, put the power drill down, take off your protective eye goggles and look around! Don’t just scan the neighborhood, but do actual research on the Internet. Figure out the prices homes are listing for in your actual neighborhood and take that into consideration before you call up Pools-R-Us. By the way, swimming pools are not a great investment — alas, another topic for another day.
