subject: Choosing Home Improvement Projects Which Increases The Value Of Your Home [print this page] Home remodeling is a necessary improvement when it improves the quality of living. However, remodeling projects that are intended to increase the value of the home can be a whole different ball game. Indeed, some projects do improve the value of your property but others are just basically draining your wallet. Distinguishing which are the projects that will increase home value is discussed here.
Initial thoughts:
You need to know first the appraised value of your house. Having this figure handy will provide you with a frame of reference to gauge the value of your planned upgrades. It is a fine line between improving value and out-pricing your home.
To say it differently, you will be out-pricing your home in the event of a resale if you invest so much money for improving it that your house would eventually end up with a significantly higher value than the other houses in the neighborhood. You will not be able to ask the amount that your home is worth and expect it to sell if all the other homes are a much lower value.
How would I know if I am already out-pricing my property?
The gurus in home marketing concur that the guideline is to never upgrade your home to more than twenty percent higher than rest of the homes in your selling radius. Listing your home for sale at a price that is twenty percent higher than the rest of your competition is the highest you should go. The upgrades which consist the twenty percent surplus has to be substantial.
For example, if the twenty percent reference for the value of your house is $30,000 then you will be risking a potential loss of $10,000 if you insist on proceeding with that $40,000 improvement project that you are planning. On the flip side of things, if you undertake an improvement project with an actual cost of only $10,000 and yet presents an an appeal or presumed commercial value of, say $30,000 then you potentially have for yourself a nice tidy little sum.
What are the other considerations?
You have to understand that some improvements may be too personal. Case in point, a hot tub improvement may excite you and feel that it increases the value of your home, would a potential buyer however react the same way? Some expensive improvements are purely personal preference and your potential buyer may not have the same priorities so you may lose a sale or not get the money you need because of this improvement.
Safe upgrades:
There are several very practical home improvement upgrades that will appeal to everyone. Any renovation done on the kitchen or bathroom or constructing a new room that can provide additional space in the house is quite safe. Landscaping is always a good and safe improvement. It creates a fine impression thereby possibly influencing the overall value of the property.
Some of the improvements you want to implement may not really be improvements but actually a 'must', such as a new furnace or installing an electrical system. These are items that may have to be rectified on a new contract. Buyers will also be drawn to a house if you clearly have the basic things covered, such as having the fixtures updated, installing a hot water heater, a furnace, or having the roof repaired. If you would like to add a carpet somewhere in there, just be sure that it is very neutral so that it appeals to everyone.
Prior to embarking on any home improvement or renovation project, it is always prudent to evaluate all the angles first.
