Saturday, 12 April 2014

Home Improvements that Pay Off – Part 1

Bringing in a new front door will increase the value of a home by 96.6% of the cost of the door. So why is this important? A homeowner or family starts to think about home remodeling when the home begins to look stale and dated, when it no longer meets the occupants’ needs or when more space is needed to meet new demands. These are all valid reasons for remodeling a home but there is one aspect of this major project that is often overlooked. How much will the renovation add to the value of the home?  This may seem like a redundant question to those who are not considering selling their homes. But the house forms a huge part of their equity and anything that adds to its value works to their benefit. And suppose for some unforeseen reason there is a need to sell the house. Will the tens of thousands of dollars spent of remodeling it be translated into a higher market value?

Increasing the market value of a home is not the sole reason for home remodeling – a home is more than just wood, bricks and cement. It is a part of the family and their comfort and safety are the primary reasons for remodeling. But knowing what kind of remodeling projects and value to a home and which do not can help homeowners optimize the return to be had from the investment in remodeling

Remodeling – The Return on Investment

Among the best home remodeling investments, projects that increase energy efficiency are very important. With a growing concern about the environment and the continually rising energy costs, going Green is a great way to boost a home’s market value. The cost of upkeep, which includes heating and cooling costs, is a major consideration among buyers and a home that is a proven energy and money saver will attract a greater amount of attention than one that requires a major project to be done to make it Green. An invest in updating and improving the ‘envelope’ of the house – new sidings, windows and insulation – will always pay off. So will money spent on more energy efficient heating and cooling systems and appliances.

Next comes the heart of the home – the kitchen. This is a multipurpose room that is used by all of the family. From cooking to homework to eating to family meetings to odd jobs to entertaining neighbors, it is all done here. Real estate agents say that remodeling a kitchen offers the best return on investment as compared to any other part of the house. Even a minor remodel can add up to almost 83% of the money spent on it to the home’s value. One of the reasons for this is the way that prospective buyers look at kitchen that they find dull and dated in a house they otherwise like. The general assumption is that to remodel a normal size kitchen will require an expenditure of around $40,000.

But, according to Remodeling Magazine’s latest Cost vs. Value Report new cabinet doors, appliances, counter tops, a sink, faucets and hardware will typically cost around $19,000. This is a perfect example of how perception affects home values and how remodeling can really pay off. However, this does not mean that an investment of $19,000 will fetch a return of $40,000. It doesn’t work that way. But getting back 80% of the investment is possible.

Keep in mind that the kitchen must blend seamlessly with the rest of the home of it the remodeling to really pay off. Putting an ultra-modern kitchen into a 100 year old home will not. It will just look out of place.

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