I just bought a new house in a new subdivision that my family and I are planning on living in for the next 5 years. We are planning to convert the kitchen to nice cabinets and quartz tops, do marble in the bathrooms, change laminate flooring to wood and tile. We'll also be doing extensive landscaping as well as re-countouring the backyard. We paid 154,900 for the house (1550 s.f.) and live in Knoxville. If we hang onto it for 5 years and do the changes I mentioned, how much do you think we could profit from the sale?
2007-01-30 10:45:52 · 8 answers · asked by GeoL 2 in Business & Finance ➔ Renting & Real Estate
In five years you may be luckey if you can dump it at 110k the intrest rate will be about 9.5% to cover all the bad loan,s if not higher.
2007-01-30 14:57:31 · answer #1 · answered by Anonymous · 0⤊ 0⤋
It is very hard to say. You will get something from some of the improvements. Note that it is easy to spend more than you can recover if you over-improve a property.
In 5 years a lot can happen. Best to expect that you will need to do some touch up before selling. 5 years of wear and tear. Fresh paint and fixing all the little things that might have broken or wore out.
In 5 years you might show a profit is you did next to nothing after finishing off the basics. People expect a yard but they might not need much for the value to have gone up. The market is the market.
In some locations factories have closed and home prices have dropped over the last 5 years. Nothing is guaranteed. Prices can go up or down. Maybe more up than down but just remember it is not a one way bet.
2007-01-30 18:54:26 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You aren't really flipping the house if you keep it for 5 years. Flipping usually means buying a fixer, making repairs and reselling quickly for a profit. Your house is new and you plan on keeping it for awhile.
The housing market cycles and the U.S. is in a down market right now, so you may make something depending on market 5 years from now. But there is no way to predict what the housing market will be 5 years out. You might actually lose money.
Also, people rarely make any return at all on remodels, particularly if the house is new and the cabinets, countertops and flooring are already in good condition. I'd skip putting in any of the expensive upgrades to the interior of a new house and instead focus on installing the landscaping, assuming the house is not landscaped now. Given the house is new, if you keep the interior in good condition and only spend money on the landscaping, chances are you will make more money in 5 years than you would by spending lots of money on the upgrades you are talking about.
2007-01-30 18:55:55 · answer #3 · answered by ? 7 · 1⤊ 0⤋
Housing prices could be flat for the next five years. They could even go down nobody really knows. Just by the price of the house this tells me there will not likely be a big gain in just five years. The biggest housing boom in history just ended so you might be a little late and the next cycle could take some time. Most likely if you hold it long enough you will make a gain, but that is always speculative and subject to local conditions.
2007-01-30 18:58:07 · answer #4 · answered by mikearion 4 · 0⤊ 0⤋
Housing values differ so much by area, you didn't say how much you were going to spend, but the fact that it sounds like you're replacing new stuff with new stuff, you might lose a lot of money.
I would call a local, licensed appraiser (start with the one that appraised your home when you bought it). See if he/she is willing to give you a "future value", based on what you intend to do.
A normal appraisal runs $3-400 in most areas. He may not charge you full price for something like this, in fact he may not charge at all. But I'd rather pay $300 to make sure I didn't blow $20,000 in improvements I'll never get repaid for.
2007-01-30 18:52:05 · answer #5 · answered by Anonymous · 2⤊ 0⤋
really depends on whether or not the neighborhood/area is desirable and the market at the time of the sale. The changes you mentioned would add value, but not enough to strike it big!
2007-01-30 18:53:59 · answer #6 · answered by Anonymous · 0⤊ 0⤋
As a loan officer I believe that in 5 years it could turn around and go for 200,000+. There's many things that could affect it over time but I would say 200,000 is a safe value
2007-01-30 18:53:30 · answer #7 · answered by condorcall02 2 · 0⤊ 2⤋
you can make tons.
Spending as little as 10K can add up to 100k value. i seen in on "house flippers" tv show. IT WILL REALLY HELP. first impression in an open house is key. the right colors, style, and environment.
2007-01-30 18:54:53 · answer #8 · answered by Anonymous · 0⤊ 2⤋