I'm considering purchasing a new townhome and looking at upgrade options. I'm on a budget, yet concerned with resale value. I think it might be worth it to spend a little in upgrades now instead so i can make a few thousand later.

Considering:

(1) Granite Countertops (~1500)
(2) Hardwood floors (~4000)
(3) Crown molding (~500)
(4) Garden Tub
(5) Upgraded Carpet (~500)
(6) Upgraded Appliances (~400-1200 depending on the upgrade)

Which of these is most useful for resale?

7/11/2009 7:07:55 PM

The countertops & hw floors seems very reasonable. That is much less than my builder wanted. The garden tub is a must, unless you have a separate shower. So I would get those. They will be helpful in reselling. Black or SS kitchen appliances are a must, so it depends what is standard.

Carpet isn't going to help with resell b/c you're going to have to replace it anyway. Crown molding probably isn't going to make much of a difference.

7/11/2009 7:13:38 PM

omg, hi tyler.

7/11/2009 7:24:22 PM

(1) Granite Countertops (~1500) - Ive never seen granite for this cheap, normally builders charge 3k-5k
(2) Hardwood floors (~4000) - again, at this price, go for it
(3) Crown molding (~500) - depending on how much of the home they are doing for this price, it can be easier and cheaper to do it yourself
(4) Garden Tub - a must
(5) Upgraded Carpet (~500) - if you have hardwood floors, i wouldnt put much money into the carpeted areas
(6) Upgraded Appliances (~400-1200 depending on the upgrade) - do this yourself. builders usually only offer selected brands / models, and overcharge

7/11/2009 7:26:31 PM

The advantage of buying appliances through the builder is that the cost is built into the mortgage which would increase my payment around 35 a month rather than 1500 out of my pocket. Depends on how long I'll be living but you get the idea...

--Tyler

7/11/2009 7:29:45 PM

my fridge alone was like 2900, i dont know what kind of appliances you're going to get for 1500

7/11/2009 7:33:24 PM

You need to price these things out to ascertain their value.

For example, I had granite installed in my kitchen for 43 $/ft^2.

7/11/2009 7:37:51 PM

listing the square footage for the granite and floors might help

Quote :

"The advantage of buying appliances through the builder is that the cost is built into the mortgage"

the disadvantage is that you'll be paying interest on appliances for 30 years...

7/11/2009 7:39:40 PM

in terms of resale, the kitchen and bathrooms are the most valuable rooms in a house, so i would look at upgrades for those first. unless you just really want expensive appliances, i would skip the top of the line stuff. when you sell the place you may want to take them with you or replace them with modern appliances at the time of sale. rolling them into the mortgage is tempting i agree, but think about it, if you were buying a place today that had 5 year old appliances in it, would you be willing to pay extra for the old appliances?

carpet is going to wear out or be replaced at the time of sale, and "wall to wall" carpeting isn't really selling feature anymore, so i would skip it.

crown molding looks nice and seems to add a little value to a place, but personally, i could care less if a house has it and will not pay a premium for it.

[Edited on July 11, 2009 at 7:51 PM. Reason : .]

[Edited on July 11, 2009 at 7:52 PM. Reason : ..]

7/11/2009 7:50:30 PM

With regards to appliances -

The standard appliances are low-end white coil stove/range, and a white dishwash.

To upgrade to a black smooth top (coiless) verion I would need to pay extra (which I believe is worth it). The stainless steel upgrades are more expensive, but I'm not convinced that is necessary. Agree? Disagree?

So it seems that countertops/garden tub are in. Molding, upgraded carpet and hardwood floors out.

[Edited on July 11, 2009 at 8:42 PM. Reason : ...]

7/11/2009 8:42:11 PM

after cleaning a smooth top a few times you'll wish you paid extra or didn't upgrade to them

7/11/2009 8:43:58 PM

http://kitchencarolina.com/deluxekitchen.html

We got a postcard in the mail for this kitchen for 8995. It includes cabinets, granite counters, sink, hard wood or tile, crown molding, etc. w/ installation and removal. (Installation of cabinets in garage is also included.) We are actually thinking of doing the one on sale for 7995 in the rental property we have. It has not been updated in 20 years and think we might sell it within the next year.

Also on the appliance note: Shop around and do it yourself. We got the stainless GE profile dishwasher (sells for like 1499) for 300 at Sears. It was their floor model and came with a warranty and we could return it if we wanted. We bought a crappy new one for the rental house for 80 dollars. Places are really hurting and are really making deals. I HATE HHGregg; however, they price match and throw things in to the deal so if Best Buy or Sears gives you a great deal you always have that option. There are coupons all over for Lowes and I saw some beautiful custom stuff on clearance last time I was over there. As for the install, call a contractor and get a flat price. I managed to figure out how to get the dishwasher in. It wasn't so bad.


[Edited on July 11, 2009 at 8:50 PM. Reason : ]

7/11/2009 8:44:33 PM

Why are hardwood floors out? That would be something I would definitely go for.

7/11/2009 8:45:34 PM

hardwoods are probably worth it.

7/11/2009 9:23:09 PM

I personally really think that crown molding makes a house look nice, especially in terms a resale because townhome communities tend to be very "cookie cutter" and if you do have to resell it fairly shortly, you want to make sure that your home stands out from the others around you. As others have mentioned granite counters, hardwood floors (in the dining/kitchen/entry foyer at least) and a garden tub in the master bathroom are all very desirable and are things I have been looking for in a home. Upgraded carpet seems silly and I really am not so picky about black appliances vs stainless steel (I would rather have the stuff that looks like stainless because it is not as hard to clean) but white appliances are sort of yuck.

7/11/2009 9:32:05 PM

Quote :

"(I would rather have the stuff that looks like stainless because it is not as hard to clean)"

im confused - since when is stainless hard to clean? thats what everyone says, but since switching to stainless its been effortless

7/11/2009 9:37:12 PM

I guess mostly with fingerprints and things, not really hard to clean, just seems to show more...especially it seems like the fridge

[Edited on July 11, 2009 at 9:42 PM. Reason : .]

7/11/2009 9:41:56 PM

i guess if you have kids, then i can imagine you might see some oil residue from fingerprints if you dont clean it (since kids manage to touch everything at kid-level)

but i guess i just use the handles on the fridge rather than touching the doors

7/11/2009 9:46:17 PM

I'd definitely do 1 & 4, and maybe upgrade the appliances so that they aren't white. Granite countertops + cheap white appliances = weird.

If you're going to do hardwood floors, upgrade/add crown molding as well. When my parents' house was reevaluated by the tax collectors a little while back the crown molding in their master bedroom that they added apparently increased the value of the place more than the crown molding ended up costing them. If you've got a decent sized townhome and that crown molding covers every room (with them doing any caulk/paint work) then I say go for it. With upgraded floors, crown molding can make a place seem a lot nicer as a finishing touch.

Don't upgrade the carpet unless you prefer carpet over hardwoods. Don't go for the stainless appliances unless your research on the MSRP of the appliances they were going to add shows that they're pricing their upgrades at a cut-rate price (and if you're going to stay there a while to enjoy said appliances).

Also, are they adding 3/4" thick proper hardwood floors for $4k, or is it some cheap engineered or laminate shit?

7/11/2009 10:47:57 PM

they may work with you to reduce the cost of some of the upgrades b/c they get them at a reduced rate to begin with. And it is a buyers market afterall.

Granite, hardwood, and the garden tub would be the upgrade musts.

The appliances are great b/c they are automatically worked into the builder warrantees. Then again you can get extended warrantees cheaply at big box stores too.

7/12/2009 1:48:37 AM

Quote :

"after cleaning a smooth top a few times you'll wish you paid extra or didn't upgrade to them"

You're doing something wrong.

I had a smoothtop at my last house, and never had any problems keeping it clean. We have a gas range now, and while the cooking is a lot better with it, it's much more of a bitch to clean.

---

For the crown molding, is the $500 for every room in the townhouse? If so, do it. Do not hesitate, pass go, or otherwise question that decision. If it's $500 per room (which sounds more realistic), it's probably worth it for you to do it yourself. Once you get the hang of it, it's pretty easy. The first room you do will have you wanting to stick your head under the mitre saw, tho.

[Edited on July 12, 2009 at 8:50 AM. Reason : asdf]

7/12/2009 8:50:46 AM

The problem with resale value on townhomes is you will always be competing with almost identical townhomes with lower prices and brand new townhomes for the same price. While these upgrades will certainly make your townhome easier to sell, I doubt you'll get much money out of them.

People buy townhomes (in the Triangle) for price. People don't buy high-end townhomes, they buy freestanding houses. Make the upgrades you want for yourself. Don't get to hung up in this "your home is your biggest investment" non-sense. Homes depreciate, land appreciates. You own very little land and have essentially no rights to the land you do own, therefore, it isn't much of an investment.

7/12/2009 9:00:12 AM

Quote :

"You're doing something wrong. "

i've never owned one - just cleaned my parents a few times and it always seemed to suck

7/12/2009 9:24:11 AM

Quote :

"The problem with resale value on townhomes is you will always be competing with almost identical townhomes with lower prices and brand new townhomes for the same price."

I'm dealing with this right now.

7/12/2009 9:29:38 AM

^i think that depends largely on the city/neighborhood you live in. If they are located in a highly desirable area, then there can still be stiff competition for townhomes and condos for the reason that detached home prices are out of reach but people still want to live in the neighborhood. I would imagine this applies more to densly populated urban areas; the triangle not so much.

7/12/2009 10:01:10 AM

my first thought on this thread was the same as patman's. ultimately there seem like 2 markets for townhomes. cheap or extremely expensive.

lots of people are getting them because they can't afford houses, but still want to own something. they are always going to compete on price. this isnt to say that you need to have some ratty ass townhome, but in your neighborhood or general size range, they'll always look for cheap.

then you have the less common people who prefer the townhome like the elderly or young professional (slightly less uncommon in some areas, but plenty of them buy houses too). they're going to want top notch places and probably limit themselves to a few locations.

id personally say hardwood is the only definite one i could see people caring about. maybe the tub. people like me (bought a house recently) might not really care about the countertops as much as people in this thread seem to suggest, but maybe im the minority.

[Edited on July 12, 2009 at 10:40 AM. Reason : appliances help but you could do those later and it may not be a good deal as noted]

7/12/2009 10:40:06 AM

I think townhome communities are becoming more common residences for empty nesters and single folk who don't want to deal with a ton of household maintenance. I'd say do what you want. It is your home, but if you're going to stay in it for a while you might as well get what you like and not worry about resale.

7/12/2009 1:03:57 PM

this is true. do whats best for you. resale is going to be a pain in the ass either way.

the madison area reminds me somewhat of raleigh. i just bought my first house and wanted to budget wisely. there were about 40-60 houses in my price range in the location i wnated to live in the city. there were over 200 condos all very similarly priced.

7/12/2009 1:08:04 PM

Quote :

"People buy townhomes (in the Triangle) for price. People don't buy high-end townhomes, they buy freestanding houses. Make the upgrades you want for yourself. Don't get to hung up in this "your home is your biggest investment" non-sense. Homes depreciate, land appreciates. You own very little land and have essentially no rights to the land you do own, therefore, it isn't much of an investment."

there are definitely a lot of hugely expensive townhomes in the triangle - and it is no longer just a 'starter home' or something people buy when they cannot afford a free standing home.

example: http://www.real-estate-cary.idxco.com/idx/4112/details.php?listingID=1635144&idxID=200

Price: $525,000

7/12/2009 1:12:05 PM

^ those are pretty pimp. I've driven by them before. They are close to RTP/540/40/55/54. Great location.

7/12/2009 1:30:13 PM

thats what i was talking about. there are condos for all prices, but anything in the middle is a pain and a half to sell. resale only works well at very top or very bottom so he might as well just get whatever suits him.

7/12/2009 1:42:47 PM

Quote :

"there are definitely a lot of hugely expensive townhomes in the triangle - and it is no longer just a 'starter home' or something people buy when they cannot afford a free standing home."

Sure, but it doesn't share two walls with 120k townhomes. It is also a very small niche, considering 525k will buy a nice house that you can actually walk to something cool. 525k will put you in Oakwood, Boylan Heights, Watt-Hillandale, Five Points, etc. Why would you want a townhome in the middle of nowhere, when you could have an extremely nice freestanding house in the middle of nowhere or a fairly nice freestanding home in a prime location. The more I look at it, I can't of why anyone would buy a 525k townhome in the middle of nowhere. At least the ones at Meadowmont are right outside of Chapel Hill.



[Edited on July 12, 2009 at 9:20 PM. Reason : I guess it's a really nice nursing home.]

7/12/2009 9:19:21 PM

Quote :

"Sure, but it doesn't share two walls with 120k townhomes. It is also a very small niche, considering 525k will buy a nice house that you can actually walk to something cool. 525k will put you in Oakwood, Boylan Heights, Watt-Hillandale, Five Points, etc. Why would you want a townhome in the middle of nowhere, when you could have an extremely nice freestanding house in the middle of nowhere or a fairly nice freestanding home in a prime location. The more I look at it, I can't of why anyone would buy a 525k townhome in the middle of nowhere. At least the ones at Meadowmont are right outside of Chapel Hill."

Who said anything about having to share walls with 120k townhomes? Is there even such a thing as a new 120k townhome in this area? 150k - 175k is more of a low-end price around here

And since when is Cary "in the middle of nowhere"? I think the Amberly neighborhoods are pretty baller, myself, and in an excellent location

I dont think neighborhoods like that have people like you or i in their target demographic, but I can definitely imagine some people would like to live in a custom 4000sq ft home, yet not have to bother with exterior upkeep / yard maintenance

7/12/2009 9:29:09 PM

The thread is about townhome upgrades and resale value. The fact that high-end townhomes exist, doesn't change the fact that ROI from upgrading a townhome is going to be far more modest than upgrading a house.

A dense development in a suburban area doesn't make a lot of sense. If there is nowhere to walk, why build houses on top of each other. I understand that one of the selling factors of a townhome is low maintenance, but if you are in that price bracket, you can hire somebody to care for your yard. After all, it's not like you don't pay for it in a townhome. Besides, for 525k, wouldn't you rather have a nice condo downtown? And yes, new developments in Cary are in the middle of nowhere.

I don't know about brand new, but there several hundred of townhomes for sale in the triangle listed under 130k.

[Edited on July 12, 2009 at 10:15 PM. Reason : ?]

7/12/2009 10:08:41 PM

FYI, builders make almost all of their money from the "upgrades" on new construction.

Those prices either mean you are getting garbage quality stuff, or have very little material.

In either case, you will get better quality material, installation and at a lower price (generally) by doing this yourself after the fact. Other than the hardwood floors, the prices you listed are very suspect.

7/12/2009 10:34:28 PM

^^ i think i am just missing the connection between "living close together" and "being able to walk to cool places"

and no, i cant think of any place id rather live less than in a condo downtown, sorry

7/12/2009 10:56:09 PM

Quote :

"my fridge alone was like 2900"

wow

i paid $1400 for my SS kenmore (on mega sale of course) and it's damn nice...

2900 is way on the high side, esp for a townhome buyer


(1) Granite Countertops (~1500) - hells yes
(2) Hardwood floors (~4000) - eh, thats a lot of bling for a townhome. pergo perhaps?
(3) Crown molding (~500) - for sure, adds a nice touch.
(4) Garden Tub - how much?> the chicks like them
(5) Upgraded Carpet (~500) - no
(6) Upgraded Appliances (~400-1200 depending on the upgrade) - depends on details. black or stainless is prob a must

7/12/2009 10:58:47 PM

if you are buying a 500k townhome in a suburban neighborhood, you must be borderline retarded.

First to lose value in a slow market, worst possible location.

The age of the McMansion is over, and that includes supersized townhomes.

7/12/2009 11:01:19 PM

i dont normally endorse the use of "retarded" on this site...but in this case it's justified.

7/12/2009 11:16:37 PM

Quote :

"i think i am just missing the connection between "living close together" and "being able to walk to cool places""

Why else would people pile on top of each other except to be close to something, ie an urban center or "million dollar view". $525k buys just as nice a house in the same location. People buy townhouses to get in a location where they can't afford a house.

Do you live in a half million townhouse in Cary or something? Just wondering where your point of view is coming from.

7/12/2009 11:49:39 PM

townhome =/= good appreciaton in most cases

7/13/2009 12:45:54 AM

There's some new townhomes being built near crossroads shopping center in Cary which are walkable to tryon village and the crossroads shopping center. They look like they may well be $300k+.

Not that this matters that much, but I'm just throwing out there that this area is growing rapidly and that the medium density housing they're putting in there fits the area OK.

7/13/2009 1:14:15 AM

To get back to the original post:

Builder upgrades tend to be overpriced. Not much chance of getting a decent ROI. I would recommend doing the upgrades yourself over time or hire an independent contractor/installer. Of your list, the things most likely to add value are hardwood floors, premium counter tops, and premium appliances. With the counter tops, I think granite is starting to go out of style. I would look at some of the other premium counter top materials.

You might also want to consider flooring and countertops in the bathrooms.

7/13/2009 8:18:07 AM

I was actually looking to purchase a townhome in the amberly area - so I imagine that most units will have significant upgrades. If I purchased a home with little/no upgrades would I have significant resale issues? I was prob going to stay in the area for 5 years or so and then upgrade to a free-standing home.

--Tyler

7/13/2009 6:35:45 PM

That's hard to say. A realtor might be able to determine that. The way I see it, you should buy the cheapest one you can, and then upgrade it over time. If you spend a bunch of money on granite and hardwood now, the style might be totally different in 5 years. You'll just have to update it again.

The less you pay now, the more updside potential you have.

7/13/2009 8:36:50 PM

you should probably do some calculations and determine if it is even worth it for 5 years. sure you'll build some equity and the market is shitty, but the market isnt going to skyrocket over the next 5 years and will probably be somewhat stagnant. subtract out all of the costs for agents both for buying now and selling later...you get the picture.

7/13/2009 8:42:02 PM

Good point. What a lot of people do who buy a towhome as a first home is live in it for x years, then buy a house and rent out the townhouse. That way you can hold it 10 years or more and have a more realistic chance of making a profit.

7/13/2009 8:50:33 PM

a lot of your questions regarding resale / value / etc may be best answered by a realtor

7/13/2009 9:07:17 PM

Quote :

"you should probably do some calculations and determine if it is even worth it for 5 years. sure you'll build some equity and the market is shitty, but the market isnt going to skyrocket over the next 5 years and will probably be somewhat stagnant. subtract out all of the costs for agents both for buying now and selling later...you get the picture."

I'm trying to make the same decision and its tough. It isn't really right one way or the other. The available mortgage rate in 5 years is my only concern.

7/13/2009 9:08:03 PM

Quote :

"Good point. What a lot of people do who buy a towhome as a first home is live in it for x years, then buy a house and rent out the townhouse. That way you can hold it 10 years or more and have a more realistic chance of making a profit."

also have to be careful with that plan. my boss couldnt sell her townhome so she planned to do that, but learned that her community didn't allow her to rent it out.

in a college town, the competition from large quantities for apartment complexes make it harder to make renting as viable as well depending on the size of your townhouse and its location.

big decision.

7/13/2009 10:03:37 PM