Author Topic: Remodeling and New Additions  (Read 2121 times)

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Offline joeyp

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Remodeling and New Additions
« on: January 02, 2010, 02:10:00 PM »
OK,  I've learned enough reading here and IHB that remodeling is never a good investment.  If  you spend $50k on remodeling a kitchen you won't be able to sell your house for $50k more, probably less than $25k more.  

But what about an addition that adds square feet to your house?  In some of the older areas of Irvine,  there is room to add a (BK-disapproved) "california room" or a single story house has room for an upstairs addition.  

If construction costs are $150-200 /sq foot and sales prices are $400-$500 /sq foot, isn't adding on a good investment?

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Remodeling and New Additions
« Reply #1 on: January 03, 2010, 08:08:00 AM »
Quote from: "joeyp"
OK,  I've learned enough reading here and IHB that remodeling is never a good investment.  If  you spend $50k on remodeling a kitchen you won't be able to sell your house for $50k more, probably less than $25k more.  

But what about an addition that adds square feet to your house?  In some of the older areas of Irvine,  there is room to add a (BK-disapproved) "california room" or a single story house has room for an upstairs addition.  

If construction costs are $150-200 /sq foot and sales prices are $400-$500 /sq foot, isn't adding on a good investment?

Depends on the addition...if you are adding good "usable" square footage (i.e. room addition) then it almost always makes sense to do the addition.  Remember, you will have to get all the necessary permits and potentially deal with a difficult HOA which can be a lengthy process.  Besides that, the tax assessor will re-assess the property with the additional square footage.
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Offline freedomcm

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Remodeling and New Additions
« Reply #2 on: January 04, 2010, 01:22:00 PM »
USC-

Is it a total reassessment to current market value (e.g. $600k), or is it a partial (e.g. your tax basis is $300k, addition is worth $150k, so $450k)

Offline pebbles

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Remodeling and New Additions
« Reply #3 on: January 04, 2010, 01:44:00 PM »
We are renovating right now.  It's very overwelming - so many decisions to make in a short amount of time.  I can't wait until the contractors are gone and we have our house back.    ::)
 
We would probably lose money if we sold our house in the next few years; however, we plan on being here for the next 10 - 20 years (fingers crossed).

Offline graphrix

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Remodeling and New Additions
« Reply #4 on: January 04, 2010, 01:46:00 PM »
Quote from: "FreedomCM"
USC-

Is it a total reassessment to current market value (e.g. $600k), or is it a partial (e.g. your tax basis is $300k, addition is worth $150k, so $450k)


It would be a partial reassessment unless you tore it down completely. I have seen a chimney and a door frame still up and it would still be a partial reassessment.

 

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