Many times, our customers think a lot about resale value when designing their house plan and choosing features. It's a worthwhile consideration, but how much weight should you give it?
I've built hundreds of homes in Oklahoma over the past 18 years, plus my father has been building homes for the past 53 years. I've seen the struggle people have with this question, and the struggle is real.
The answers to these three questions will tell you how much time and effort you should put into considering resale value when building a new home on your land.
1. How Long Will You Live in This Home?
The answers I hear range from the national average of three to five years all the way to forever. For many clients forever is a realistic time frame, as they've worked hard for years to be able to build their own home. For other clients who are working their way from a starter home to a bigger home to accommodate a growing family, the shorter range is more realistic.
I've also seen families who said three to five years end up living in the same house for 20, and I have families for whom I've built two or even three forever homes. There's always uncertainty. Situations change, things go better than planned, or something else unexpected.
With no way to predict the future, should you always plan on resale?
Here's an example
We're currently building a "forever" home for a young family for whom we've already built two others, both of which they've sold in order to build the new one. In each case, they built what they wanted (at the time), and I honestly don't remember talking about resale either time. Both homes sold just fine for enough money to allow them to do what they wanted in the next home. The first home was a modified version of a house plan we had offered from a portfolio, and the next two house plans we designed from scratch to meet the family's needs.
2. How willing are you to sacrifice your needs for someone else's needs in the future?
I obviously worded that question in a way that gives away what I think about it. Having said that, it's a serious question to think about, and there are two ends of the spectrum.
If your goal is to maximize the equity you can extract in three to five years, you definitely need to give some consideration to the floor plan and features. Do your research on the sizes, features, and prices of building in a neighborhood. Plan to build in the middle to small range for the neighborhood, and invest only in the features the house must have in order to bring a fair price for the neighborhood. The same approach applies to a home built in a rural area—you just have to work harder to do the research to compare your home to others like it.
If every house in the neighborhood has granite countertops, stick with granite. You don't want to put in laminate because buyers will expect granite. Nor do you want to put in quartz, because you won't recoup the costs.
If your plan is to live in this house for a long time or forever (an even longer time), then resale becomes less of a concern. Someone, maybe your kids, will have to sell it eventually, but you're really building this house for you (and your family), not for some theoretical buyer some years in the future.
There's a reason you're thinking about going through the painful process of designing and building a new house. You want things exactly how you want them, and you don't want to pay for features you don't care about. It's for you, not for some stranger in the future. Don't sacrifice the real purpose of building for some secondary, probably unknowable, future need.
3. How confidently can you predict the future?
There's so much uncertainty that you can't predict the market years in advance anyway. If you live in Oklahoma, think about all those houses you see with the big river rock or flagstone covering the outside. Thirty-five years ago, that's what was in. Now, you drive by and think "1980s" and wonder how much it will cost to tear that ugly stuff off and replace it with brick.
If you build a home now and live in it for 15, 20, or even 30 years, who knows what will be in style? I don't think there's any point in worrying about it. Build what you want so you don't look back and regret doing something in the design or amenities later.
The bottom line?
Think through your time frame and options and put resale value in the proper perspective. Be realistic about how long you'll live in this house, and if your plans change later, at least you'll know you made the best decision possible.