Many homeowners are surprised to learn that the equity in their home comprises a larger portion of their net wealth than their stocks and/or retirement funds. Compared to conventional investments that rise & fall frequently, housing is relatively stable and keeps up with inflation in most years.
A home that is well-maintained and offers up-to-date systems and amenities will have a higher value than a comparable home that is poorly maintained or lacking the conveniences and extra living space that today's buyers want.
Remodeling is the key to protecting and enhancing the investment value of your home, not to mention its many other benefits.
"What improvements will add the most value to my home?" To answer that question, it is important to understand that remodeling differs from your financial investments. With remodeling you can benefit and enjoy your investment, (live in it) while it is growing in value. Stocks and bonds don't deliver on this aspect.
The other part of your investment return is the increased resale value of a remodel. The price of your home will largely depend on the prices that comparable homes recently sold for in your neighborhood. The value assigned to the improvements you made to your home depends on a number of variables and heavily on its location and overall condition. Some remodeling projects lift the value of a home by the entire cost of the remodel and sometimes by even more.
Consider these to increase the dollars you get back from remodeling:
· Maintaining your home is the most critical of all investments that you can make to your home. The shape it's in matters as much if not more than what other attributes your home may have.
· The quality of the work you have done on your home is another factor that can't be ignored. If you want to make a good investment, shoddy workmanship, low-grade materials and inferior products will wipe out any value the remodeling might have added to your home.
· Remodel for yourself and your own family, not the next owner. It is a gamble to predict the likes and dislikes of the next home owner. However, the more your tastes stray from the norm, the less likely you are to get maximum return from your improvements. Stay with styles, colors and features that have broad appeal.
· Kitchens and bath remodels are the two most popular remodeling projects year-in and year-out, no matter where you live. These two rooms carry the most weight when it comes time to sell your home. Attractive kitchens and baths fully outfitted with popular features will not only help sell your home faster, they also can drive the price a buyer is willing to pay for your home.
· Extra space in the right place offers a high rate of return. Larger, open family rooms, master bedroom suites and eat-in kitchens are all examples of spaces that most buyers value highly.
Although it is difficult to put an exact price on the resale value of a particular remodeling project, for most of us the real value of remodeling is the comfort and pleasure it adds to the years we spend living in our home.
