To every home owner, renovations and home improvements are the inevitable. After all, we all want to increase the value of our home, while making it more comfortable and homey for us to live in. But are renovations really improving the value of our home by much? And what improvements get you the biggest bang for the buck?
According to an article on CNN Money, renovating just doesn’t pay off like it used to. Back in 2003, if you spent roughly $38,000 on remodeling, you would get back about $31,000 when you sell the house. The difference between then and now is that while the returns are still about the same, the cost of the renovation has dramatically increased.
So instead of spending $38,000 on remodeling, you now find yourself spending $51,000 for similar improvements. The return on investment is still around $31,000 for $51,000 worth of improvements. This is all taken by the National Association of Realtors for the average cost and values of home remodeling in the U.S.
So what home improvements should you do?
Well, considering the cost of materials has gone up, stick with cheaper improvements. Be careful to not price out the neighborhood, and invest in small projects that make the outside of the house look better. This means upgrading your kitchen into an upscale model will probably not increase your returns by much. On the other hand, if you have a smaller single family home – finishing the basement is a great way to increase the amount of finished living space.
The rest is common sense, and relies heavily on what the average buyer in your area looks like. If your home is among many larger family homes, make it more kids-friendly with less white carpet and more resilient materials. If you live among more extravagant homes, work on the curb appeal. Lastly, if you live in cold climate, well insulated windows are a plus.
For more information on how you can renovate wisely, check out the CNN Money article, as well as How to Make Home Buying an Investment.
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