Repair & Improve

Great Remodeling Investments

Is Your Remodeling Project Really Going to Add Value to Your Home?

by Tom Kraeutler

It’s not much of a stretch to say that remodeling has become America’s obsession. Don’t believe it? Check this out: One in 10 homeowners spends more than $5,000 annually on remodeling, according to Harvard’s Joint Center for Housing Studies. That’s $150 billion a year on residential remodeling.

But before you shell out $5,000 on a bathroom or kitchen remodel, make sure you’re doing it for the right reason. If you’re not planning on moving for 10 years or more, remodel for your own pleasure, say the industry experts. But if you want to add value to your home for resale, be more careful.

Guidelines for Making your Remodeling Project Pay Off
According to the National Association of the Remodeling Industry (NARI), the hottest remodeling projects include kitchens, baths, other interior rooms, additions, and window replacement. But the key to any successful remodel project is quality work, regardless of what it is, experts agree.

Don’t make the expensive mistake of starting a remodeling project that isn’t going to add value to your home. A kitchen remodel is one of the top five most popular remodels in America right now, but a $20,000 kitchen remodel isn’t necessarily going to help sell a manufactured home.

An outdated kitchen will be the first thing that turns off a prospective buyer, agree REALTORS. A minor kitchen remodeling project is going to cost - on average - nearly $15,000, according to Remodeling Online, which equates into a 88 percent return on investment. 

Fixing up a tired bathroom will really wow prospective homebuyers. And it will add 81 percent on your return if the house is sold in one year from the time the work is completed. Not bad!

Assessing Property in Your Neighborhood
Before you start in on a remodeling project, sniff around the neighborhood to find out what may be considered a ‘reasonable’ improvement and whether the buyer’s market would approve. Keep track of what homes are selling for in your neighborhood. Keep your home’s value just below the higher end homes in your area to be safe. Talk to an experienced REALTOR and visit open houses, too.

How Much Do You Have to Spend Before You See a Return On Your Investment?
Many people see thousands of dollar signs when they think of a remodeling project, but sometimes it’s the little improvements that will escalate your home’s resale value. According to Remodeling Online, 70 percent of remodeling dollars did go to improvements such as additions or major remodels, but the other 30 percent paid for maintenance and repair, such as painting or re-roofing.

According to another survey conducted by homegain.com, you’ll see a 594 percent return on your home if you declutter and clean it before putting it on the market. A $2,000 return on something that took a little elbow grease and about $300. Other inexpensive improvements include fresh paint, carpeting, and some exterior cleanup, adds HomeGain.

So depending on what you have to spend on a remodeling project, you’re bound to improve the price of your property regardless if you decide on a $20,000 kitchen remodel or spend a few weekends painting and replacing light bulbs.

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