Q: I live in the center of town on a dead-end street in one of Boston?s most affluent and desirable suburbs. Currently, I?m in one of the last two-family homes right near the town center and am located adjacent to the top three schools within an already top-tier school system (elementary, middle and high schools). I?m contemplating converting the two family to a single family at a very ?basic? level ? meaning that there will be absolutely no exterior change (beyond the front door being unified from two to one leading to a central staircase). Interior will of course be overhauled.
At a very basic level, is this likely to increase the value of the home given the location and related details (such as schools etc.)? I understand that such conversions typically lower the value, but I?ve also been told that in some instances they can drive value up by creating a previously unavailable asset in the neighborhood.
Thoughts? Reactions? I plan to stay for at least 5 more years and then sell once my youngest is out of the house, so this would also be about the value ?five years from now? versus in 2011/2012 time frame.
?Anonymous
A:That?s a tough question as there many factors involved in a evaluating a property?s worth. If the current duplex is currently valued at X based on its condition, square footage, amenities, rental income, etc., then the question is the same to determine the value of Y (the value of the property as a single family residence that has been remodeled and no longer has rental income potential).
Before you can determine Y you will need to do some forecasting. The Y value will be greatly affected by the amount of upgrades you perform and the value of similar single family homes in the neighborhood. By upgrading to a new front door and entry with a grand stairway just inside along with other upgrades, you could easily surpass the value of X.
I would put your plans together with the specific upgrades you have in mind to make the conversion then call a Realtor. They can review all of the neighborhood comp values with you so that you can make an informed decision. Your plan to stay in the home for five years makes good financial sense as you will be able to amortize the cost of the upgrade over 60 months or so and stand a much greater chance of achieving an acceptable return on your investment. Also, we?d like to think the real estate market will be on an upswing during this time. Since your home is in a desirable area its value will likely increase.
Lastly, be sure not to overbuild for the neighborhood as you will never recoup your investment. Your Realtor can guide you in this area as well.
Good Luck!
Lee Dworshak is a Realtor? with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.
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