OVERBUILDING IN A NEIGHBORHOOD

The old adage, "The three most important things to consider when buying a home are location, location and location" will always hold true. The value of an individual piece of property or home is usually dictated by its location. However, the surrounding area and neighboring homes play a major role in determining the value of an individual property as well.


If you are considering enlarging the size of an existing home, doing an expensive remodel or making costly improvements, please exercise care. When the time comes to sell, you may not be able to recapture your investment. If you overbuild or over improve for a neighborhood, with all of the surrounding homes having a lesser value, the value of your improvements will be reduced. The worst investment a homeowner can make is to have the best home in a neighborhood. The best home increases the value of neighboring properties. However, the surrounding, less valuable homes pull down the value of the over improved home. In essence, you are doing wonderful things for the neighbors but they are not returning the favor.


When considering improving or remodeling an in existing home, be sure the evaluate the entire situation and be sure your investment will be a good. Also, rather than investing in your current home, consider selling it and buying the home you desire in a neighborhood that justifies a larger, more prestigious residence.