| Adding value to your home by knowing which projects to undertake.
Have you been asking this question lately, “Is it a good investment to remodel?”
If so, know that you’re asking a very smart question. Most in the home improvement, and real estate industries believe that if you make wise investments in your home, you’ll bet more than the psychological advantage of being more comfortable with your home.
If you’re planning on selling your home in the next year, a survey of local real estate agents reveals a variety of advice, and some agreement. Done right-at the right price, strategic remodeling can add value to your home if you are planning to sell within a year. But, be prepared to spend money to make money.
Returns Associated with Home Improvement Investments
IMPROVEMENT |
MINIMUM
COST |
JUMP IN SALE PRICE |
AVERAGE RETURN |
Clean/Unclutter |
$350 |
$2,378 |
594% |
Fix electric & plumbing problem |
$400 (Per problem) |
$1208 |
156% |
Fix kitchen/bath |
$2120 |
$4,885 |
138% |
Repair flooring |
$1714 |
$2,589 |
50% |
Paint exterior walls |
$2381 |
$3233 |
34% |
Replace carpeting |
$2765
|
$3,900 |
39% |
* The National Association of Realtors surveyed 2,000 real estate agents nationwide and found that moderately priced home improvements, ranging from $80 to $2,800, made in preparation for sale actually yield the highest returns when a house is sold.
It's also important to acknowledge a variety of factors that can affect both the cost of remodeling and the resale value of homes.
- Costs for materials, subcontractors, and labor
- Overhead and margins remodeling companies
- Project size and scope, and quality of finishes, have a disproportionate influence on final project cost.
- Return on investment depends on the value of the house itself, the value of similar homes in the immediate area, and the rate property values are changing in the surrounding neighborhoods.
- The value of suburban homes will vary when compared with rural and urban counterparts
- Availability and pricing of new homes affects the value of existing homes.
But, why sell so soon after a remodel, especially if you’ve endured months of noise, dust and inconvenience?
In considering these factors, remember that you may or may not be saving by deciding to move rather than remain in your home. By using your home’s equity to renovate and improve your home you may be gaining possible tax advantages and giving yourself psychological advantages that will allow to remain happy in your home for years.
For assistance you need to use the equity in your home properly. Learn more about Coastal’s Home Equity Loans and Home Equity Line of Credit Loans. |
