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Real estate question...
Posted on 3/31/10 at 7:42 am
Posted on 3/31/10 at 7:42 am
So I live in the energy corridor in Houston and pruchased a home in a new subdivision several years back. The lot my house is built on is ~3,800 sq. ft. I love the house however I would really like to install a pool sometime in the future but I simply don't have the yard for it. There is a lot next to my property that is vacant ~5,000 sq ft. I guess the question I have is how much can I expect my property value to increase if I were to purchase the lot, fence it in and install a pool?
The house currently is appraised at ~270k and the lot next door can be bought for probably around 50k. This would have me investing at a minimum 80k for this pool but also increasing my property size by ~5,000 sq ft.
Anyone have experience with this type of thing and can ballpark how much I can expect the property value to increase?
Thanks.
The house currently is appraised at ~270k and the lot next door can be bought for probably around 50k. This would have me investing at a minimum 80k for this pool but also increasing my property size by ~5,000 sq ft.
Anyone have experience with this type of thing and can ballpark how much I can expect the property value to increase?
Thanks.
This post was edited on 3/31/10 at 7:55 am
3
Posted on 3/31/10 at 7:47 am to HoustonsTiger
You would probably lose money on an investment like that. My parents bought a house that already had a pool. The guy that owned it previous;ly said he spent $31k putting the pool in and when he got the appraisal, the pool appraised for $9k.
Posted on 3/31/10 at 8:00 am to guttata
Thanks for the input. I know that installing a pool as an investment is a bad idea, but I think the main question I'm trying to get resolved is if the lot will also lose value since a pool was put in, or if it will retain it's value by adding my square footage to my property?
Posted on 3/31/10 at 8:10 am to HoustonsTiger
How long do you plan on living there?
Posted on 3/31/10 at 8:18 am to John Merlyn
The only thing missing from the house is a big yard / pool. So, if I were able to do that I'm not sure I would ever move (other than work re-location). I love the house, location, sub-division etc. However, all that said it's possible I would consider moving in a few years to another property with a bigger yard / pool.
Posted on 3/31/10 at 9:00 am to HoustonsTiger
quote:
how much I can expect the property value to increase
Your tax statement doesn't break out the land and dwelling into separate items?
Posted on 3/31/10 at 9:11 am to arrakis
Would the neighborhood association allow you to buy a lot to put a pool on it? I would imagine that most neighborhood associations would only allow a house to be put on the lot. What if someone wanted to buy a lot next to their house and they put a storage unit on it to store their landscaping business machines?
This post was edited on 3/31/10 at 9:14 am
Posted on 3/31/10 at 9:14 am to HoustonsTiger
The lot next door will lose value. If you decide to sell the lot down the road whoever buys it will have the extra cost of filling it in to prepare a suitable building area. You obviously will get an increase in value but it will not make up your cost.That said, if you LOVE that house and you don't see yourself moving in the next ten years then go for it. I would be surprised if your zoning ordinance allows the construction of a pool if none of your neighbors have one though.
I am an appraiser
I am an appraiser
Posted on 3/31/10 at 9:20 am to I Love Bama
Thanks for all the input. I am just kicking this idea around in my head and never thought about whether the city would even allow the installation of a pool. I'll have to check into that.
What kind of % are we talking about here? I guess I need to find out if it is even possible per HOA / city, but assuming that it would be OK, as an appraiser what % of value would the lose? Or I geuss a better way of looking at it for me would be how much would my propery value increase?
I figure I'd spend 80k on this project, could I expect the property value to increase by 50-60k?
quote:
The lot next door will lose value
What kind of % are we talking about here? I guess I need to find out if it is even possible per HOA / city, but assuming that it would be OK, as an appraiser what % of value would the lose? Or I geuss a better way of looking at it for me would be how much would my propery value increase?
I figure I'd spend 80k on this project, could I expect the property value to increase by 50-60k?
Posted on 3/31/10 at 9:27 am to arrakis
quote:
Your tax statement doesn't break out the land and dwelling into separate items?
It breaks the values out in a dollar amount between resident (~210k) and land(~60k), yes. But I'm sure the land value of the vacant lot will decrease with a pool on it, but how much will my total property value increase in comparison by expanding the square footage of the total property with the addition of a pool?
Posted on 3/31/10 at 9:33 am to HoustonsTiger
You'll lose money, unless property values go up significantly during the time you live there. (which is possible). Expect to lose ~$30k in the short term.
However, if you're going to live there fir a 12+ years, your job is secure, and you can't find a home that you would rather live in for the same costs.. Then go for it. Just make sure you can get clearance from HOA and permits.
However, if you're going to live there fir a 12+ years, your job is secure, and you can't find a home that you would rather live in for the same costs.. Then go for it. Just make sure you can get clearance from HOA and permits.
This post was edited on 3/31/10 at 9:38 am
Posted on 3/31/10 at 9:34 am to HoustonsTiger
It is hard for me to guess. I don't have any experience or knowledge about your market. I think it would be very safe to say that your overall property value will increase around 50k.
Say that 5 years in the future you decide you need the money and want to sell that extra lot. Lets say that the price has appreciated and that lot is now worth 60k (land only). How much will it cost to fill the pool in and prepare the lot to build on? An appraiser would deduct the cost to get the site ready from the 60k in appraising the lot.
I am telling you this strictly from an investment standpoint. If you love that house and don't plan on moving then I would go for it.
ETA: Shankapotomous (sp?) is a residential appraiser around that area I think....he would know more than anyone here.
Say that 5 years in the future you decide you need the money and want to sell that extra lot. Lets say that the price has appreciated and that lot is now worth 60k (land only). How much will it cost to fill the pool in and prepare the lot to build on? An appraiser would deduct the cost to get the site ready from the 60k in appraising the lot.
I am telling you this strictly from an investment standpoint. If you love that house and don't plan on moving then I would go for it.
ETA: Shankapotomous (sp?) is a residential appraiser around that area I think....he would know more than anyone here.
This post was edited on 3/31/10 at 9:37 am
Posted on 3/31/10 at 10:08 am to I Love Bama
Thanks guys for all the help. I know it's difficult for people to put hard numbers on it without knowing the specifics. I suppose I'll talk to an appraiser and see if he can put some figures on it.
I get the feel that the majority viewpoint is that if I plan to stay in the house long-term (which I would) then this potentially could be a valid idea...
I get the feel that the majority viewpoint is that if I plan to stay in the house long-term (which I would) then this potentially could be a valid idea...
Posted on 3/31/10 at 12:14 pm to HoustonsTiger
You dint need to pay an appraisor if you're in it for the long-term and can't find a home that is just as good of a fit for you at <$360k or so.
If you're confident that you can afford the upgrades, then all you need to ask is if it will improve your quality of life enough to justify the expense.
Otherwise you are essentially asking the appraisor to evaluate the value of your property at some point in the distant future. He is not psychic. His expertise will be in the here and now. Who knows how your neighborhood will fare in 15 years. Or how much labor will cost, or what regulations will be in effect 15 years from now?
Losing $30k in equity right off the bat is pretty risky though. I can see where people get screwed there, when they suddenly have to move.
If you're confident that you can afford the upgrades, then all you need to ask is if it will improve your quality of life enough to justify the expense.
Otherwise you are essentially asking the appraisor to evaluate the value of your property at some point in the distant future. He is not psychic. His expertise will be in the here and now. Who knows how your neighborhood will fare in 15 years. Or how much labor will cost, or what regulations will be in effect 15 years from now?
Losing $30k in equity right off the bat is pretty risky though. I can see where people get screwed there, when they suddenly have to move.
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