Reply to Should we spend 500k on a renovation?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][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.

Thank you. That's very interesting. So how about those ramblers and split levels? If count only the above grade area, their sqft will be almost halved... Is it a new appraisal rule?

I'm very interested in your estimate because I have a 3900 sqft above ground 1980s colonial in 22102 (there is another 1100 sqft of finished basement area). It's 8 foot ceiling on a half acre lot. I'm curious about how much $$ of renovation shall I put into this house that will make sense? I'm thinking about renovating the bathrooms, expanding deck, and landscaping etc.

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][/quote]

Thank you. That's very interesting. So how about those ramblers and split levels? If count only the above grade area, their sqft will be almost halved... Is it a new appraisal rule?

With that criteria, the average is $285sqft where you live. Obviously much impacts this…what kind of street you are on, the condition of the lot, the schools, upgrades, or major cosmetic or repair issues…ect.

Assuming your home is in the average (not low end), I would think with a nice renovation you could get $313sqft and would not spend over $110K

When we appraise we give “bonus” for stuff like a finished basement and such. The PPSQ starts out at a basic level and the 20K might be given for a screened in porch, 30K for a basement, 40K for a spectacular kitchen….ect. It works its way up from there.[/quote]

Why is 22102 so much cheaper than 22101 given they are both in McLean? To be honest my purchase price is already higher than your estimated improved price/sqft. 22102 is in an even better school pyramid (Langley), just curious why the price/sqft is only half of 22101? Thanks![/quote]

I did a very rough estimate the sis not pull out the places on large lots for the first estimate. You gave me specifics so I pulled everything sold in the last 3 months with your lot size and in a similar sqft range and pulled the average. [/quote]

Thank you PP. I guess when calculating ppsqft, some use above only, some use both? Anyway, I think your hindsight of the 110k threshold of renovation makes a lot of sense. [/quote]

Below ground is never used for appraisal values. Only person who uses below ground is the tax man, lol!

Again, value is assigned to below ground space the same as value would be added for a screened in porch, or a remarkable kitchen, but is not added into square footage. [/quote]

Actually appraisal counts below ground at a lower rate assessments do too[/quote]

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