Home Remodeling - Will Your Remodeling Project Payoff?

Remodeling projects can increase the livability and the marketability of a home. Some projects will actually increase the value of the home and allow an owner to recapture the cost of the updating or additions. Professional appraisers suggest looking at some basic factors in determining how much money you'll get back from a remodeling expenditure, such as:

• Neighborhood Norms: Compare your home to similar homes in the neighborhood and apply common sense to the decision. For example, if your home has only one bathroom while most homes have two or more, then it might make sense to add one. You don’t necessarily have to install a top-of-the-line luxury bathroom either. Perhaps a half-bath will suffice.
  

• Expensive Isn't Always Better: Sometimes less expensive renovations offer the highest return. Exterior paint and landscaping improvements can add considerable "curb appeal" and boost your home's ability to sell. On the other hand, the remodeling losers tend to be basement recreation rooms and swimming pools.
  

• The Demand: If houses in the area have a good track record of selling, chances are you’ll recoup most of the money for your remodeling efforts. Of course, the amount depends on the condition of the rest of the house, as well as the value of similar homes nearby, the availability of new homes and the rate at which property values are changing. Your location, whether urban, suburban or rural, will also affect your home’s value.

How much can you expect to recoup from your remodeling project? Following is data collected from several sources on remodeling values:

• 100%: Kitchen remodels, bathroom additions and bathroom remodels.
  
• 80%: Family room additions, master bedroom suites, window replacements, roof replacements, siding replacements, deck additions and two-story additions.
  
• 60%: Attic bedrooms, basement remodels and sunroom additions.
  
• Less than 60%: Home office remodels.

Following are remodeling tips to get the most out of your investment:

• Do not buy the most expensive material. A $100 kitchen sink will probably get the same amount for your house as a $500 sink.
  
• Stay with a neutral and timeless look. Anything too trendy will narrow your field of buyers and have them thinking they will have to remodel again.
  
• Adding lighting in a naturally dark room or area gives the feel of a bigger house.
  
• Use inexpensive accessories and special touches to give your remodel a custom look, such as accent paint, upgraded faucets and upgraded door handles.

How long should homeowner’s expect the remodel to maintain its value? The expected lifespan of a remodel is 10 to 15 years. After that, it is expected that the remodel or addition will need to be updated again.