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Wednesday, June 12, 2013

Current needs vs. future value - aging and real estate

I got a call recently from a friend who wanted some advice so that he could better advise some aging relatives. As is more and more often the case these days, the relatives in question are fairly elderly and in failing health. Their ability to deal with the demands or constraints of their own home, which they do not wish to leave, is also fading. They have received some advice about making changes to the house to better accommodate their current needs. This often happens and making some of the changes that might be required can have significant impact on the future sale value of the property.

 
Some things might be fairly minor and unobtrusive, such as putting grab bars beside the toilet and in the bathtub. These could still detract somewhat from the potential future value of the house with some buyers. Other things might involve making major changes to the house, such as taking out a standard tub/shower combination to put in a handicapped-accessible Shower or one of those walk-in tubs that you see advertised. These are great solutions for current issues that the elderly might be encountering; however, they are also likely to be major detractors to selling the house later.

 
Another issue that I get questions about involves whether to take away some space from something – a bedroom, a pantry or a closet – in order to move the laundry up from the basement, where it was located in almost all homes built before the 1980’s. This, too, seems to be a great solution to the failing ability to deal with stairs just to get to the laundry. This project also involves doing some major work, since water supplies and a drain (and a pan under the washer) will be required, as well as electrical work and perhaps a gas line will be needed, as will be venting for the dryer. This is not a small project and the result could well result in greatly diminishing the resale value of the home, especially if an entire room (maybe a bedroom) must be sacrificed to accommodate the first floor laundry re-location.


Quite often as the elderly lose mobility things like ramps to the front door are built or accommodations for walkers or wheelchairs must be made to the inside of the house – for instance widening doorways is often done. Many of these things could have negative impact on future value. Some homes just don't have the layout or space to accommodate things like ramps without them detracting greatly from the curb appeal of the house.


So, what are caring and concerned relatives or friends to do to help? What advice can they
give; and, how can a Realtor help? I certainly don’t try to give council to the elderly or their relatives about what they should or should not do to make their lives easier and more fulfilling; however, I can provide some insight into the impact on the real estate market value of the house, if the changes that might be proposed to their homes to accommodate their current needs are made.  


There is a train of reasoning that goes – the heck with future value; it’s their home let them do what they want to and must do in order to live as comfortably as they can and stay in it for as long as they can. As the owners of the house, it’s up to them to make decisions that might detract from future value in order to give them comfort and a better lifestyle right now. As I get older myself that argument has strong emotional appeal.


An alternate path (one might call it the path of logic) says that they should be advised to take the value that they can get of the place out of it and find a more accommodating place to live out their remaining years, perhaps in an assisted living community. That argument makes perfect sense and normally elicits the perfect storm of protest from the elderly homeowner. There are certainly lots of reinforcing arguments that go along with the logical path – the upkeep of the yard, the general maintenance and upkeep of the house itself and the inevitable point at which it will all become a moot. The logical thinker side of me finds that argument to be strong, too.


So, don’t ask me what to do. I haven’t figured that out for myself yet. You can ask me what the impact on the market value of the house might be if the various age-related projects are done and I will try to answer that question. With an aging Baby Boomer population about to enter this phase of life, it will be interesting to see if the person who has already made the changes to the home to accommodate the safety, mobility and health needs of the elderly might have stumbled upon a positive selling feature instead of a negative. Only time will tell. Stay tuned.

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