I meet with new buyer clients frequently who tell me they’re okay with “doing some work” and not paying for another owner’s remodel. And many times, that’s a sound plan when it comes to kitchens and bathrooms. After all, these renovations are typically pretty straightforward, and they provide an instant bang for the buck. Buy a house with a tired, 1940s kitchen and bath, tart them up, and you’ve added immediate value.
However, there are certain property upgrades that should be appreciated and valued more than I think they are in San Francisco. A chef’s kitchen with a CaesarStone counter and a slick, high-end soaking tub in the master suite are all fine and good. But what about an upgraded foundation–or a substantially repaired one? Or a new furnace/ductwork; roof; seismic upgrades; repaired dry rot/termite damage; upgraded plumbing and electrical? Though you can’t necessarily see these sorts of repairs in slick marketing photos, they’re important building components that need periodic attention.
A good portion of the aforementioned items can be fairly expensive. For example, the foundation repair/improvement work being done on my own two-unit building is so not cheap. We found a leaking drain pipe under the concrete that wouldn’t have been addressed had we not opened up the ground. And the seismic upgrades we’re doing at the front & rear of the building will also contribute to a more solid footing. Sure, we have a remodeled kitchen and bath in our unit, which is great, but future owners will most likely not have much else to do in light of the work we’re doing.
I’ve seen some good buildings sit on the market a while because owners were trying to recoup all the money they spent on certain structural items. It’s difficult to quantify how much money you can expect to recover on, say, the $20,000 roof you installed, or the $10,000 on plumbing and electrical upgrades. These items will certainly add value, but how much value will be up to buyers. In general, they’re the type of items you address as part of long-term property maintenance. And hopefully, the buyer who likes your house will be savvy enough to appreciate the upgrades and repairs.