If you are wrestling with the decision as to whether or not to make improvements to your home, you have many variables to consider. Determining if you’ll see a return on investment when it’s time to sell, whether it will lower your cost of living, or improve your quality of life enough to warrant spending money on home improvements, isn’t always easy. Knowing where to begin on a project or even deciding what project to take on can be difficult as well. Fortunately, if you select the right projects and have them done well, you can reap the benefits in many ways, both in the immediate as well as the distant future.
This is the benefit homeowners are most concerned with in today’s economic climate. For many families and individuals, the home is the largest asset in their portfolio. When it comes time to sell, most can’t afford to take a loss or not see the financial returns from their improvements. With job relocations, change of employers/income and family expansion, it is not often a family (especially a young one) will remain in the same home for decades. There also are fewer qualified home buyers on the market than a decade ago so sellers will want to have their properties stand out in order to move the home faster. Below is a list of the more profitable, moderate cost improvements and their average return on investment in 2014 according to remodeling.hw.net:
Entry Door Replacement (Steel)
JOB COST:$1,162 RESALE VALUE: $1,122 COST RECOUPED: 96.6%
Garage Door Replacement
JOB COST:$1,534 RESALE VALUE: $1,283 COST RECOUPED: 83.7%
Minor Kitchen Remodel
JOB COST:$18,856 RESALE VALUE: $15,585 COST RECOUPED: 82.7%
Deck Addition (Wood)
JOB COST:$9,539 RESALE VALUE: $8,334 COST RECOUPED: 87.4%
As you can see, many times the right home improvement not only adds to the enjoyment of your home, but you also recoup most of the money when it comes time to sell. When homeowners set aside $20,000+ they dream about granite counters and steam showers; the smart investments however often include items such as a new furnace, new gutters, a drainage system to keep the basement dry, new landscaping to increase curb appeal and lots of fresh paint in addition to the examples above.
Improved Living and Enjoyment
What you’ll also notice from the examples above is that while large scale kitchen and bathroom remodels add value to your home, they seldom offer a strong ROI relative to smaller, less glamorous projects. Large scale remodels can still be a good investment, just be prepared to recoup a smaller percentage on average when you sell your home. Other improvements that routinely fail to recoup a large percentage of their cost such as home office additions, sunrooms, and a pool can still make sense provided you truly believe in the intrinsic value they possess. If you are looking to make these improvements, it would be best to remain in your home for a longer period of time in order to enjoy them and worry less about recouping the costs at time of sale.
Along with the financial benefits at the time of sale, certain home improvements can virtually pay for itself through bill reductions and energy savings. On the smaller scale, better insulation in the attic can help keep that warm air produced by an eco-friendly furnace inside your home instead of it escaping outside. This will help save money in the colder months that you can then use instead on spoiling your family around the holidays. You can even find tax incentives for making eco improvements to your home. There are tax benefits for a vast array of improvements such as tankless water heaters, solar panels, and even energy-saving window treatments. With the costs of traditional energy expected to increase, smart homeowners would do well to make these eco improvements and enjoy both the instant tax savings, as well as reduced energy bills in the future.
The writer, Brian Levesque, is a proud home owner who strives to keep his home in perfect working order. To facilitate this, he hires professionals to keep his gutters cleaned. For his friends he recommends visiting www.gutterexperts.com for exterior work. You can learn more about Brian on Google+.