Remodeling: What the Experts Say
Architect and Builder Bob Formisano, founder of Home-Cost.com and leader of the preservation and repair of the historic Ford homes in Dearborn, Michigan, has a few tips when thinking about the ROI of remodeling:
Consider these 3 things to consider when deciding whether or not to undergo a home improvement project:
1. How your project impacts your home's appraised value
2. How long you plan to be in the home
3. How strong the resale market is in your area
From PBS's Hometime series [http://www.pbs.org/hometime/house/resale.htm]
1. Keep the tastes and needs of future owners in mind. <em>Remodeling</em> magazine does an annual report evaluating the return on investment for a variety of home improvements.
2. Figure out what the market will bear. Compare the appraised value of your house as it is with the price of houses in your immediate area that already have the improvements you're thinking of making. If you can do the project with the budget of that difference, it's worth thinking about.
3. Evaluate the cost of remodeling versus the cost of moving: How much would a new mortgage be, compared to a cash-out refinance or an equity loan? Factor in both interest rates and fees. What are the costs of moving versus the costs of living through remodeling? What about the cost of a new house with the features you want? Some people find remodeling cheaper than what they have than to buy or build something comparable.
And, finally, from the The National Association of Realtors' [www.realtor.org] 2009 Cost vs. Value Report, the average nationwide return on investment of major remodeling projects:
- Deck addition -- 80.6%
- Major kitchen remodeling -- 72.1%
- Bathroom remodeling -- 71.0%
- New roof -- 60.5%
- Family room addition -- 65.3%
- Master suite addition -- 65.2%
It's Okay to be Selfish
Though remodeling is often undertaken as an effort to increase your home's value, it's important to think of yourself, too. Resale isn't everything. Even if there's little chance of recouping your investment when you sell, it's okay to spend the money for those granite countertops (or custom closet!) because you are investing in your quality of life, not just your house.
California Closets: Life Lives Here.