About 6 in 10 recent home buyers will consider remodeling their new home in the next 3 to 6 months. Determine whether a home improvement will add value to your home could be complicate. When consider improving the condition of your home by adding room, renovating kitchen and baths or expanding your attic or even landscaping your yard, it could make you a lot of return in the future and it could also cost you a fortune and not be able to add any value.
We all have seen the HGTV’s home improvement shows. There are some factors to consider when it comes to home improvement.
1. Your budget. When making a dollars and pennies evaluation, first is to have a proposed budget in mind. Then based upon your budget includes the following factors such as building materials, labor, building (county and/or city) permits and any potential changes to your homeowner's insurance.
2. If you have a vacant home, the next thing you have to put into consideration is the mortgage payment. Can contractors finish the project within the time frame? I have seen a contractor doing a 2-month project and did not finish the job until almost a year later. You need to have a back up plan if the contractor is lack of performance or if you have extra cash for the mortgage payment while the home is vacant and under the renovation.
3. Improvements will add the positive value. According to the Remodeling magazine’s 2006 annual Cost vs Value Report, within the top 10 nationally measured projects, an upscale fiber cement siding replacement, midrange vinyl siding replacement and wood window replacement are the top 3 projects have a highest return due to their energy efficiency.
Average nationwide return on investment:
Bathroom remodel - 84.9%
Major kitchen remodel - 80.4
Deck addition – 76.8%
New roof – 73.9%
Master suite addition – 72.6%
Family room addition – 71.5%
4. Improvements might add negative value. As the housing market cools, you need to think twice for the improvement or upgrade which might negatively affect value of your home. According to Remodeling magazine's annual cost vs. value survey, you can get a very good return on kitchen and deck remodeling. However, adding a swimming pool (the safety concern for a family with small children and the extra cost for maintenance), the addition of a huge room (what other homes look like in the neighborhood? Would the addition fit within the neighborhood?), trendy finishes (too update? Or what the house will look like in 5 or 10 years) and the Jacuzzi (a Jacuzzi in the master bedroom is fine. However an outdoor Jacuzzi with a 15 jet streams could raise buyer’s concern for maintenance and the power consumption) might drive your potential buyers away.
5. DIY. You can save a significant amount of money if you can do the jobs yourself. One tip to remember is that you can save money by hiring yourself but make sure to do the jobs like a Pro. If you can not handle the jobs, hire professionals (licensed plumbers, licensed electricians or licensed and bonded contractors).
Finally, the type of improvements you would like to do and how it will fit within other homes in your neighborhood might have a huge impact on your return. For instance, for a neighborhood with two or more baths, adding extra bathroom will increase the value of your home. However, for a neighborhood with homes at average about 1500 square feet, adding a big room will not be a wise decision. In addition, your local real estate market plays an important role in home improvement. If the market is hot and it is the seller’s market, you might luckily get a good return for the money you have invested. Contrarily, if the market is soft and there are more inventories of homes on the market, you might get none or little payback for what you have spent. Remember, while you live in your home and enjoy all the happiness and comfort that your home offers to you, always do your home work when it comes to home improvement and remodeling.
Websites I found to be useful to this topic
http://www.hgtv.com/ - the Home & Garden Television Network has free resources for decorating, remodeling, and gardening.
http://www.diynetwork.com/diy/home_improvement - The source for the best do-it-yourself tips for home renovations.
http://www.bobvila.com/ - Do it yourself with help from home improvement and remodeling expert Bob. You can also find a “How to library” and live Videos with Step-By-Step, How Tos, etc.
Linda is a licensed realtor in Georgia. When it comes to selling, buying or investing, Linda is here ready to serve all your real estate needs.
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