The Whole Package

More thoughtfulness about the whole project. The goal is to put in as little money as possible and get as big a return as possible. We've discussed $0 in--Broadview is supposed to appreciate 8%/year, Zillow already values the place higher. But two years later, the roof will be even closer to end of life.

So, imagine that we put on a new roof and repaint the outside. We pop out the garage and install a brand new garage door. We install a gas range, new refrigerator and dishwasher, along with new cabinets and a quartz countertop. We improve 3 bathrooms and replace a couple of windows. We re-paint most of the rooms. Call that Basic.

1948 House 4BR, 3.5 BA, 4450 SF at 12024 7th Ave NW

The question is: Is Basic enough of a package? Will elements like the oil furnace, or the odd enclosed breezeway, or blue wood deck, or the lack of a media area spoil the overall package? Here's a freshly painted, new roofed house with a snazzy kitchen upgrade. 3 bedrooms, 2.5 baths, 1596 SF. My gut says that might sell for as much as $640,000 ($401/SF).

What would a high-tech hydronic heating system, or a dramatic Trees Room add to the sale price? How about a metal roof? I'd like a drywalled garage with an epoxy painted floor--does that add value? What about popping ceilings up for clerestory windows? Our old friends Wolf and Sub-zero?

I'm sure that more square feet would help the price. 400 SF would make $640,000 a steal at $305/SF. But to really add value, that 400-600 SF should include another bedroom and full bath. That's the way to break $700,000. 4 bedrooms, 3.5 baths, 2,196 SF with the paint and the kitchen and new roof--could be $730,000 ($332/SF). Hopefully the new bath would be as eye-popping as the kitchen--fancy shower, soaking tub, twin lavs, quartz counters, glass shower door, heated floor, walk-in closet.

Basic costs about $52,000, done cheaply. If Basic could sell for $640 (I don't think it can), we'd net $71,208 profit, or 137% of the construction investment.

French kitchen in 12-year-old comparable at 206 NW 143rd.

So, add a 600 SF high-end Master Suite. Trouble is, that could be $100,000 by itself--$166/SF makes sense for the second floor structure and high-end finishes. But we can swing $152,000.

So here's the pitch: 4 BR, 3.5 BA, 2196 SF. New roof, new kitchen, new baths. Still got an oil furnace, no dramatic Trees Room, no metal roof, no Wolf and Sub-zero. We might get $750,000 if the kitchen and master bath really pop. The net is almost exactly the same as Basic--$72,650--but now it represents only 47.8% of the construction investment.

Here's a comparable: 206 NW 143rd St 4/3.5, 3622 SF, sold for $825,000 last October. It's got 1,426 SF more than us on a 6500 SF lot (ours is 10,665 SF). Thing is, this house is 12 years old. 12024 7th Ave NW is 4/3.5, about as old as we are, but it is 4,450 SF on a lot our size. It sold in December for $835,000, but it does have a peekaboo view of the sound. (The Zestimate for it is over a million.) If $/SF matters to buyers, we would be asking $341.50/SF at $750,000, not the $188-$227 these comps got. At $227, we could only ask $498,000.

The blurb for the 12 year old house is: "Remodeled in 2011. Absolutely top-of-the-line kitchen French kitchen featuring white oak hardwood floors, a Lacanche Sully gas range, limestone hood, marble tile backsplash mosaic by Francois & Co., stunning granite countertops, enormous granite topped island, custom cabinetry by Hewitt Cabinets, Thermador Freedom refrigerator and freezer columns (paneled to match cabinetry), Miele La Perla dishwasher (paneled to match island cabinets), under counter JennAir microwave, custom powder room featuring a natural river rock wall."

13250 6th Ave NW is a few years older than us, with 4/2.5 and 2790 SF. I considered this house--it's on a nice dead end street with more expensive homes nearby. It sold for $588,000. If I put in $152,000 and have to sell for $588,000, I lose $76,746 on the investment.

The answer is that we can't do everything, and yet we must do some things that are not of obvious utility. We have meat and potatoes and basic eye appeal, but there should also be some sugar and some vitamins. Some surprises, like the power room with the river rock wall, and some good-for-you things like replacing the decades-old heating vents. It's the whole package that seals the deal. I'm sorry that I can't just dictate what the elements must be, but the economics forcing me to be more careful...and more clever.