October 22nd, 2015
After living in your home for awhile, you’ve decided it’s time to remodel something in the house. Maybe you got a tax refund or a great bonus, and want to invest it in your home. In the back of your mind, you’re probably thinking “What will have the best return if I sell this house down the road?” And that’s a great question to ask.
While it’s good to think about the monetary return on investment, you should also spend some time thinking about the emotional one as well. If you spend most of the time in your kitchen area, perhaps that’s going to bring about the best return rather then remodeling bathrooms that look clean and function well.
Or perhaps you want a swimming pool. Rarely does a pool pay off in resale value, but maybe it’s your dream to have pool parties, or spend the summer with an iced drink on a floatie. Your enjoyment of the upgrade should be taken into account otherwise you might resent the remodeled room.
Just because a project is expensive does not mean it will yield a bigger pay back. Painting the entire house inside and out isn’t very costly, but can have a huge return because the place looks new.
If your remodel is adding on a room, keep it in the same architectural style as the rest of the house. The flow will feel consistent, and future buyers may not even know it was an add-on.
Consider your neighborhood. If you spend $100,000 to upgrade to a gourmet kitchen with sub-zero refrigerators, and the average home in the neighborhood sells for less than $500,000, you are not going to get your money back. You will have your happy factor from the years when you used it, but no one else will pay the extra for it.
You can do a partial upgrade instead of the whole enchilada.
Avoid the unusual unless you plan on staying in your home for the rest of your life. Stick to neutral tones and porcelain tile floors, showers and backspashes for bathrooms and kitchens.
Don’t pull equity out of your home if you plan to sell in the next three years.
There are five types of remodel projects per About.com. You can read about them in more depth here.
So, to conclude, the longer you stay in your home, the more you will recoup your investment. Balance the project with what is going to bring you the greatest joy. If you plan on staying in your house for a long time, you can invest more in areas that may not pay off as quickly as if you were planning on selling within two to three years.
Also, talk to a Realtor who specializes in your neighborhood what they have seen as the best investments for remodeling.
What do you want to remodel in your home?