The physical condition of property has the most obvious and visible effect on value. Often, little things that could easily be fixed are left unfixed to the detriment of that property's market value. Both today's price and the rate of equity growth in the future are affected directly by what you see when you look at that house.

Conditions of the property are directly within your control. Four aspects include:

1. Cosmetic conditions of land and building. Anything that affects only the appearance of your property may be called "cosmetic" in nature. The two most obvious cosmetic conditions are the paint job and landscaping.

You enhance property value by keeping the properly fresh and new-looking, repainting as needed. If you do not paint when needed, property value is held down. The choice of colors matters, too. Selection of an unconventional color, tends to detract from value. The more bizarre the color the more reduction. Cosmetic nonconformity can restrict your market because, even though the problem is easily solved by repainting, buyers tend to think in terms of what they see and less in terms of what could be changed. While it might cost about S2000 to have your house repainted, a nonconforming color choice might reduce value by $5000 or more.

Dark-colored houses tend to make negative impressions and to look smaller than they are. Even a well-maintained paint job with too dark a color might cause lower offers simply because of the impression such color choices make. To get an idea of what is popular on the market today, drive through newly built subdivisions and observe what color choices are being used. For the most part, developers tend to use neutrals ¡ª white, off-white, gray, and similar colors, thus allowing a lot of latitude in trim colors, landscaping coordination, and selection of draperies, for example.
Landscaping advertises the house and sets a tone. A well maintained area makes a very positive impression, while a poorly maintained yard takes away value. The problems are easy to fix in terms of both time and money. The house looks old and shabby when the yard is neglected, but a couple of days' work can make a lot of difference. A carefully planned, well cared-for yard makes a modest house look more impressive.

2, Level of deferred maintenance. Some properties have deferred maintenance of a low level, and those conditions are easily cured. Other forms of deferred maintenance may require thousands of dollars to fix. You need to be able to tell the difference before making an offer on a property. Examples of expensive deferred maintenance include:

• Extensive painting, landscaping, and other cosmetic deficiencies that add up to a lot of work.
• The need for upgraded plumbing and electrical systems in older homes.
• Leaking roofs and rotted-out gutter systems.
• Obsolete and inefficient heating and cooling systems.
• The need to upgrade windows to energy-efficient replacements.

These types of repairs will cost money, in comparison to minor work you can perform on your own for little expense and without the need to hire outside professional help. Houses usually need a round of repairs ever)' seven to eight years. So if you buy a property that is six years old, you should expect to go through a repair cycle fairly soon thereafter. You might want to reflect that in an offer you make on the property, perhaps based on an inspection report. After 15 to 20 years, you should expect another, more extensive maintenance round, this time probably involving a new roof, upgrade or replacement of heating and cooling systems, and replacement of appliances. Repair and renovation is big business. 

3. Qualify of improvements. Property values are affected by the quality of workmanship, both in the original construction and in subsequent repairs and upgrades. So important is this consideration that some lenders will not grant home improvement loans to homeowners planning to perform their own work. The risk is that the job won't be finished, or the quality will be so poor that the home-owner will end up having to hire a professional to fix the mistakes¡ªwhich means the lender may hand over the money only to discover later that more money is needed to complete the job. Unless you are a contractor or highly skilled in home improvement, you should plan to work with a professional contractor to complete major renovations. You should also be sure that all the proper permits are taken out. work is inspected, and that the quality of the work passes the local code requirements.

4. Type of improvements. Some improvements add more value than others. Keep this in mind and check remodeling industry surveys now and then. The most popular improvements are new or upgraded kitchens and baths, followed by windows, room additions, sun rooms, and other interior work. A recent survey aiso shows that most homeowners perform remodeling work within 18 months of purchase. Improvements that tend not to add value include swimming pools, greenhouses, and highly specialized rooms without broad appeal. As an investor (as opposed to a homeowner). you should be especially sensitive to creating functional living space rather than customized, expensive features most people don't want or need.

Additions of bedrooms and family rooms tend to add value over the long term, but probably not within the first five years after completion of work. The delay is an estimate based on the principle that ail real estate needs to season, including improvements. The delay is not hard and fast: it is only an estimate based on price averages. That means that improvements need time to become valued on the market. They also may reflect the problems of nonconformity (discussed next), so that features that exceed average features of other homes in the area will not appreciate as rapidly as you might wish.

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