how much money can i invest in improvements?

Question

i own and live in a duplex that i hope to sell in 3 years depending on the market. since the utilities are not seperate, and there is not adequate parking for tenants, i think it will sell better if converted to a single home. how do i determine how much i can safely spend on renovations?

it is a primarily owner occupied, single family area. to split up the utilities would cost a fortune. it was originally a single home. to convert it back would basically involve takin some walls out, and framing the upstairs kitchen to be a bedroom. it would go from 2 br down1 br up , to a 5br 2 bath

no room to add parking, can't park on street overnight, single drive, so we have to move cars around, pain in the butt

Answer 1

I would have it appraised the way it stands, get bids on how much it would cost to convert to a single family unit. Get comps on homes that match what you think your home will become once the project is complete. Than do the math. The market should turn around someday and your value will go up whether it is a duplex or a single family unit. Also get bids on how much and how possible it is to add parking and separate the utilities.

I would think it would not be worth it to convert your duplex to a single family home esp if your current neighborhood is full of duplexes.

Just read your update. Depending on your town, permits, zoning etc. If thing weren't done when it was split you may have no option but to return it to a single family dwelling. If you can keep it a duplex get the comps both ways add in the costs of construction and let the calculator decide.

Another issue is were you get the money. If you a take loan against the duplex/home you will be limited to what the bank will loan against the house.

Answer 2

Two steps. First, get quotes on the work that you are contemplating. Then get a comparative market analysis from a Realtor on what you can reasonably expect to sell the property for as-is and once the conversion has been done. B eguided by those numbers.

A few observations may be in order. If your home is in a neighborhood of duplexes, converting it to a single family home may not be worth the conversion costs. Your place would stand out as an "odd duck" and while it might be worth more as a single family home in a neighborhood of single family homes, the increase in value in a neighborhood of duplexes may not be enough to cover your costs.

Consider improvements that are more likely to improve the return on your investment. The two rooms that carry the most weight in any home are the kitchen and the bathrooms. You stand the best chance of recovering the most money by bringing them up to date with carefully chosen updates.

In a neighborhood of duplexes, consider the value that an investor would put on any improvements. Such things as splitting utilities are very attractive since they lessen the chances of squabbles over waste of utilities. If it's possible to create more parking space within the property boundaries, that can be a MAJOR improvement especially in a crowded neighborhood with limited on-street parking.

Of course the usual guidelines on wall and floor treatments still applies to a duplex. $300 worth of fresh paint can return several times that amount and improve the chances of a quick sale. New carpeting can also return 100% or more if you buy carefully, especially if the current carpeting is seriously "uglied out."

Good luck!

Answer 3

I would not call home improvements an investment. First, construction cost is extremely pricy. Secondly, the amount you think you can get it done for, typically won't cut it. Lastly, home improvements don't always increase value. Since the improvements made might not even matter to the prospective buyer.
Fliping homes has a high risk to benefits ratio. So I would suggest only spending what money in your protfolio you are comfortable gambling with.
Best of luck with your home.