5 Ways To Make Your Principal Residence Remodeling Pay Off
Amanda C. Haury | Investopedia – Fri, 23 Nov, 2012 (Please see my comments at the end)
Remodeling a home can be a very costly venture. Homeowners looking to add value to their homes may try to add upgrades or renovate entire sections of their homes to make them more marketable. Not all home upgrades and renovations are worth spending your hard-earned money on , though. Here is a look at five ways to make your home renovation worth the money and effort you put into it, along with some pitfalls to avoid along the way.
Repair What Needs to be Fixed
The renovations that will yield the most value for your home are repairs. Focus on fixing the areas of your house that are in desperate need of attention from a contractor or handyman. According to an article released by Realtor.com, you will be more likely to get the best value from handling repairs than any other renovation. Whether you are planning to sell or stay in your home, handling repairs is most certainly worth the effort. Examples of repairs that go a long way include fixing a leaking roof, replacing broken kitchen tile and having an electrician rewire a faulty outlet. Even the smallest of repairs can increase your home value.
Plan to Stay a While
If you are going through with your plans to renovate, it is likely that you are either deciding to stick around for a while or you’ve decided to move. While at one time homeowners could expect to get back what they put into their home renovations, either out of use or when they sell their home, in today’s still stabilizing housing market, there is no guarantee. This is called ROI, or return on investment, and the amount you get back all depends on the type of renovation project that you have decided to take on .
Forget the Add-On
When it comes to larger renovations, ditch the add-on plans and instead opt to remodel and upgrade the structure you already have. Additions can be very costly, and the amount that is added to your home value is not likely to come anywhere close to the amount you paid for the remodel in the first place. Rather than shelling out a lot of cash on an addition to your house, work with what you have and upgrade your home where feasible. (unless you are adding a suite to create income)
A smart move to make when remodeling is to include energy efficient appliances, windows, doors and more. Not only will these add-ons help you save money on energy , but there may also be tax breaks that you can take advantage of. For example, EnergySTAR products are eligible for a 30% tax break, making going green a financially and ecologically smart move.
Focus on the Kitchen and Bathroom
Two areas of the house where a remodel would most benefit you is the kitchen and the bathroom. According to an article released by HGTV.com, kitchens and baths are the most expensive rooms to renovate. They are also the most frequently used, however, so the remodel will definitely be well appreciated. Additionally, by renovating these rooms, you typically get a 100% return on investment. Regardless of whether you sell or remain within your home, the upgrades you make in the kitchen and bathroom will be well worth the money and effort you put into them.
The Bottom Line
Home remodels and renovations can definitely pay off if you plan carefully. Repairs, along with upgrades in the bathroom and kitchen, far outweigh other renovations and add-on projects you would undertake. By planning ahead and understanding how your renovation project will affect your bottom line, as well as home value, you are protecting your investments and hard-earned money in the process.
To Your Wealth