Reply to Should we spend 500k on a renovation?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]If you want to look at this from a mathematical point of view, which I do because I’m an appraiser, here is my take.

Lets assume you live in McLean 22101

Let’s assume we are looking at the average house size of a home UNDER 2M (price per square foot goes DOWN the lager the home, a big home has diminishing returns)

This fictional home based on current listings is 2051 sqft and goes for $535/sq ft. I’m speaking of homes under 3500sq feet, because any larger the price per sqft starts to plunge.

You will see an uplift from the AVERAGE for a well updated home of 10%, this means your home potentially could be worth $588/sqft if you do a very nice quality renovation

Lets say your current home is REALLY beat up and is worth only $486/sqft

If being a prudent investor is your goal and you live in the beat up home, I think you could sp[twitter]end $210,227 and if you do a bang up job, at least break even before realtor fees. I would be leary of adding square footage as you start now working with diminishing returns.

If you tell me your zip code and FINISHED above ground square foot I can give you your exact formula.[/quote]

Hello Appraiser PP, May I ask if your 3500sqft threshold is for above finished area only? Does ceiling height affect home price too? Thank you![/quote]

Yes...above grade only is counted. Cieling height does impact value, but that's blended into the price per sq ft. Of course that above analysis has one house in McLean that is throwing the ppsqft artificially high because there's a small tear down on a large subdividable lot in there.  I'd need to also pull lot size to get a more accurate estimate.  Also that analysis includes pimmit hills which also, believe it or not has a high ppsqft. Those homes are more "valuable than the larger homes.

The larger the home the worse off you are. [/quote]

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