Will Your Remodeling Project Pay Off?
With the changes that have taken place in the real estate market over the last few years, it is more important than ever to look closely at and choose wisely any remodeling projects you may be considering.
The average return on value for a remodeling project declined from 87% in 2005 to 64% in 2009. Follow these simple guidelines to ensure the maximum return on your remodeling investment.
1. Repair rather that upgrade:
Having many upgrades in your home can enhance the enjoyment of the home as well as attract buyers. However, defects caused by improper maintenance of your home can quickly become a major financial burden for you in addition to eliminating the interest of any potential buyer. No one wants own or purchase a home with issues.
By neglecting to disclose defects to your potential buyer, you are putting yourself at risk to pay a penalty. This, in addition to having to foot the bill for the repair, will only add to the time and expense of closing a potential deal.
If need be, have a home inspection. Address any problems that the report reveals. By performing routine maintenance you will ensure the comfort and safety of your home as well as making it more attractive to buyers.
2. Remodel existing space rather than adding square footage:
The current trend in real estate favors quality over quantity. A multi-use great room for example, is more desirable than a formal living room and separate family room.
Consider finishing a basement or attic. Keep an open floor plan idea in mind as you visualize reconfiguring the space you use now into more user friendly square footage.
3. Don’t over-remodel or upgrade:
When planning a project, keep the neighborhood in mind. Your amenities should be comparable to the other homes on the block, especially if you are planning on selling.
If your plans are to stay in your home for more than five years, now may be an excellent time to consider doing that home improvement project you’ve been putting off. Home improvement contractors are hungry for work and are willing to offer more competitive pricing just to keep their workers busy. Getting multiple bids may translate into a real bargain for you. But, as always, don’t base your decision solely on price. Always ask for and check references.
If you plan on moving within 3 to 5 years experts agree that you should not take on the expense of a major project. The risk is just too high that your investment, aside from necessary repairs and cosmetic work, could be lost while the real estate markets continues to struggle.
4. Think Eco friendly and Tech infrastructure:
Green features save you energy and money, as well as making the home more desirable to todays eco-friendly home buyers.
Take advantage of federal tax credits, plus local rebates and tax incentives (see dsireusa.org) by replacing worn appliances with new Energy Star appliances and adding extra wall insulation.
If you do open a wall for a construction project, consider adding extra cable and Ethernet ports. At a cost of about $80 per room, you will ensure your home will have the capability to utilize new technologies that come along.
Do some research and carefully consider your goals when planning a remodel project. Make an informed decision in order to benefit your individual situation and maximize the return on your investment.
Tags: home improvements, Selling A Home