Home Improvement Solution

Posts Tagged ‘Resale Value’

You made some smart decisions about the housing market and now you’re sitting pretty in a house with some equity. It may be time to tackle a home project that will improve both resale value and your enjoyment of the house for as long as you live there. But how do you decide where to put your money? What home improvements will provide the biggest returns in terms of value and comfort? Here are some basic tips for deciding how to spend your home improvement dollars:

- For most people, their home is their single biggest investment. Protect and grow that investment by selecting improvements that will increase the home’s resale value. Real estate experts agree that kitchens and baths are at the top of the list of good home improvement investments.

- Even if you’re undertaking the home improvement primarily to boost your own enjoyment of your home, it’s important to consider resale value. Remember that potential buyers might not share your tastes and while it may be easy to paint over the bright orange walls of your sunroom, replacing loud tiles or fancy-shaped windows could be a much more expensive fix come resale time.

- Do your homework on financing options. A poor financing choice could mean you’ll be paying high interest on your home improvement long after the last workman has left your house. Consider a cash-out refinance which allows you to refinance your mortgage for more than you currently owe, leaving cash on the table for you to put towards your improvements. The interest rate on a cash-out refinance is usually lower than what you would get from a credit card.

Even if you don’t need to pull cash out, a refinance might still be a wise move. Homeowners who bought their houses a few years ago may be in a good position to refinance at a lower rate and free up more cash each month to put towards improving their investment and their lifestyle.

If you’re like me, you’ve been sitting around the house all winter keeping a mental list of the home improvement projects you want to start. Now that spring is here, it’s time to get started. Not only will home improvements beautify your daily surroundings, they also add to the resale value of your home. So, there’s no time like the present to pull out a paintbrush or two and start making home improvements.

The easiest and least expensive way to dramatically improve both the exterior and the interior of a home is with paint. A fresh coat of paint breathes new life into a tired looking living room. Nothing says curb appeal like a gorgeous exterior color. To get things started, buy some masking tape, tarps, rollers, brushes, paint, spackle and sandpaper.

Touch up any cracks in the walls with the spackle and sandpaper, tape off your carpeting and sideboards, and get to painting. Remember to select a neutral shade that will suit a wide range of tastes if you intend to sell your home anytime in the near future.

Once the walls are gleaming and gorgeous with their new paint jobs, take a good look at your old lighting fixtures and hardware. Does the brown stained-glass chandelier in the kitchen look more like it belongs in the local pizzeria than in a high-end home magazine? Perhaps a trip to the hardware store is in order.

You can replace a light fixture and modernize a room for less than $100 and an hour of work. It will totally change the ambiance of the room. It can even change the atmosphere of the whole home if the fixture is in a highly visible spot. The same is true for hardware; changing doorknobs and drawer hardware can shave years off the appearance of your home.

Now that you’re seeing your home in a new light, so to speak, let’s give some attention to your cabinetry and countertops. Are they still looking like a country kitchen from the 1980s? Well, installing new cabinets is a lot of work and costs a pretty penny. What about paint or new hardware for the cabinets? It’s possible that painting them a dark gray and adding some glass panels will change their look entirely.

Try to improve your cabinets without breaking the budget. Then, use the money you save on your cabinets to renovate your countertops. Granite has dropped dramatically in price in recent years, and looks dynamite. Have professional installers give you an estimate on the cost for new countertops per square foot. If granite is still a bit out of your price range, laminate countertops are an affordable option that will make your kitchen shine again. Even putting tile over your old countertops is a viable option if you’re trying to keep your home improvements on a budget and renovate your kitchen on the cheap.

Spring is in the air, and it’s the perfect season to get started on home improvement projects. Plant some new shrubs, paint your bathrooms, change old light fixtures and add some spice to your kitchen. You’ll benefit from the beauty of your home improvements every day, and all of your hard work will ultimately add to the resale value of your home.

Home improvements are made for a variety of reasons. Sometimes those reasons are confused in the mind of the homeowner. That explains the first of the common mistakes listed below.

1. Not Being Clear About Your Purpose

With any home improvement, you should be clear about why you are doing it, so you can be clear about whether it is worth the cost. People often confuse their motivations, saying that a given project is not only to make the home more livable for them, but is an “investment” as well. The problem is, it may not be an investment that yields any return.

In a report recently in Remodeling Magazine, the average cost and added value of various home improvements was shown for different areas of the country. The worst remodeling projects, including creating a home office, only returned about half of the cost in added value. With the best, including a basement remodel, you get back about 90% of what you spend.

Let me do the math for you: every single one of the improvements in every area of the country was a money losing proposition on average. Now, it is true that some are better than others. The average attic bedroom addition only cost $13,000 more than it adds in value to the home, while you lose $30,000 on the average master bedroom suite project. It is also true that if you are knowledgeable and creative, you can add more in resale value than you spend.

Be clear about this. If you spend $68,000 creating a master bedroom suite, and it only adds $38,000 to the value of your home, this is not an “investment.” The real cost in the long run is $30,000. That’s what you pay for your personal enjoyment of it.

With that in mind, you may want to consider how long you will live in the house, and divide that costs into those months to decide if it is really worth it. If you move five years later, that nicer bedroom cost you $6,000 per year to enjoy, or $500 per month. If that seems reasonable, do the improvement. If an extra vacation or two annually, or $500 per month going into a retirement account, or any other way you could spend that $30,000 sounds better, drop the project or scale it down.

2. Not Being Clear In The Contract

If you don’t know what you want, you are likely to pay a lot more than you think for home improvements. This is because whatever you agree with the contractor on, that’s what you get for the price. Every little change will be extra, so know what you are trying to do in advance, and make sure it is included in the bid and the contract.

You may be wise enough to have a deadline in the contract, rather than just an “estimated date of completion.” But a deadline alone may not be enough. You may also want to consider a clause that specifies penalties for not completing the job on time. A line saying that the price will be reduced by $100 for each day past the deadline is a “motivational clause.” Also, never pay in full until the job is done.

3. Not Being Prepared For The Process

Large home improvements involve large messes. You may have to deal with dust and piles of construction materials for weeks or longer. Consider this when planning when to do the remodeling. Ask the contractor (before you sign the contract) if he will be completely cleaning up the mess in the end, and what you can expect during the process. Will they be providing a bathroom, or will the worker need access to yours? Will there be security issues, like walls that are open to the outside for days? Will you have to chain up your dog or warn the children about dangers?

The bottom line? Avoid these common mistakes and you will probably be happier than most with your home improvements.