Secrets of Profitable Remodeling
What is remodeling?
Remodeling is updating or altering the appearance and functional utility of a building. Home remodeling is big business. It accounts for about 40% of all residential construction spending and about 2% of the U.S. economy.
So to answer the question “Is it worthwhile to remodel my house?”
Probably; however, there are many factors to consider.
Why Remodel?
First you need to determine what’s your motivation? Why do you want to remodel? Are you remodeling for your self and your families enjoyment or to increase your appraised value?
Second do not expect a full recovery of your remodeling investment. Some estimates are as low as 40 cents on the dollar. Others, depending on what you remodel may recover more than 80%.
When to Remodel?
Other factors that will impact the return on your investment:
1. What sort of economic times are you experiencing? Are you in an up or down market?
2. How long do you tend to stay in the home? The longer the better for a good return on your investment.
3. How’s the housing market in your area? Are you competing against a lot of new tract homes?
4. How will the remodel will impact your appraised value? Find out before you invest your money.
5. How strong is the resale market? Ask a local Realtor for comparable sales for your area.
6. How soon do you plan on selling?
7. Do you plan to sell with full MLS service, FSBO, or Flat Fee MLS?
Who should remodel?
Ask yourself who will do the remodel? How good are you at remodeling?
If you’re not really handy, maybe find a friend and barter or trade services.
Are you going to do the work or hire the project out?
If you are considering remodeling, get three bids from local firms. Ask brokers, lenders, and appraisers if the cost of the remodel warrants completion.
The percentage of return on the investment for remodeling will change over time and vary from area to area. Ask the professionals.
Weigh carefully the expense of remodeling based on the return. Do only those projects which will bring you a significantly higher sales price or greater family pleasure.
Improvements and upgrades cause anguish for most sellers, because a seller wants to recover the full dollar value of the improvements. The industry standard suggests you will get back about 40 cents on every dollar. Don’t expect to recover the full amount.
For Example, if you put in improvements totaling $10,000, you should expect a net return of approximately $4,000. As a seller, you must remember that you put in that nice brick walkway because you wanted it, not for its resale value.
What should you remodel?
Average 2007 cost vs. a value report – average ROI
Deck – 85.4%
A major kitchen remodel – 78.3%
A bathroom remodel – 78.3%
Kitchen and Bath remodels are always safe to consider for good dollar return on your investment.
Know this answer; are you adding something to the home that will bring you and your family pleasure and enjoyment or are you adding something to add value?
Two very different considerations.
Areas of remodel that will bring you only marginal return on your investment are:
1. Home office
2. Sunroom additions
3. Family room additions
4. Master suite additions
Regional differences are also a consideration.
In the West Kitchens and baths are big.
East coast and North leans more to siding, dual pane window and energy types of remodeling.
The South is big on family rooms, sidings, kitchens and replacements.
And the Mid West leans toward kitchens, baths and decks.
Summary
Overall the two normally safe areas to consider upgrading and remodeling for the greatest return on your investment, are bathrooms and kitchens.
You need to answer these questions before you begin:
1. Why are you remodeling?
2. Who will do the remodeling?
3. What are you going to remodel?
4. How long do you plan to stay in the home?
5. How will you pay for the remodel?
6. What return on your investment are you expecting?
If you answer these questions and plan your project, you can probably recoup between 40 and 80 percent of your remodeling costs.
Article Source: http://EzineArticles.com/?expert=Wee_Dilts
Nine Things You Should Not Do When You Remodel
Building and remodeling choices are largely a matter of personal taste. Whether you are building a new home or remodeling an existing home the goal is primarily one of making the home more comfortable and practical for your family. But at least somewhere in the back of our minds is at least some consideration of how our decisions affect the resale value of the house.
To help you avoid some common pitfalls that can negatively affect the value of your Connecticut home, here are ten tips to keep in mind when you start thinking about remodeling.
1. Never improve a home beyond everything else in the neighborhood. This might be wonderful for someone who is deeply entrenched in the community and wants to stay put at all costs. But prospective buyers do not have this commitment to the community and generally will not be willing to pay an excessive amount for a house that has been over-improved. You might have the biggest and the best house, but why would someone pay more to live an a neighborhood that can’t compare?
2. Be very careful about trendy paint colors. Ordinarily, you will be better off with neutral colors when you put your house on the market. Some buyers will like bright colors, others will like pastels, and others will like darker colors. These trends change very quickly, and you cannot discount the importance of personal taste.
3. Don’t install windows without moldings. This might have been popular a few years ago, but when selling a home, it is important that it look finished. Moldings add character to rooms and frame the view through windows.
4. Don’t use concrete block for exterior walls. This has been unpopular for many years. It is interpreted as economy building and offers an undesirable exterior appearance. If you have concrete block walls, a good home improvement project would be covering them with something more attractive (inside and outside).
5. Upscale bathrooms with spa features are very desirable, so don’t settle for a basic master bathroom. You don’t have to let this get completely out of hand and try to create a bathroom that offers everything. But you should have a spa tub or shower and some of the luxury amenities, at least in the master bathroom.
6. Don’t choose a bowl-type bathroom sink that sits on top of a counter. These are being regarded as passé and impractical. The fad is over, so don’t leave your bathroom outdated.
7. Don’t install spiral staircases. Experience has shown that these are dangerous and difficult for children and older people. As the majority of the population ages, these space-saving designs will become increasingly unpopular.
8. Replace the hardwood laminate and bamboo floor covering. Bamboo tends to warp and scratch and hardwood laminate stains easily, changes color, and doesn’t stand up to repeated sanding. If you are looking for something environmentally friendly, it might be worth a look at cork floor covering.
9. Concrete Countertops have had their day. Concrete was briefly popular for kitchen and bathroom countertops. It could be shaped and colored; it looked clean and modern; but it doesn’t hold up as well as promised, and the fad is done.
Although you will want to watch the latest trends and listen to your realtor’s advice about what is and is not selling well in your locality, these tips can help you avoid some costly remodeling mistakes.