For the year 2020, many homeowners have contemplated different things that need to be taken care of financially. People are trying to save the most they can. It’s understandable to think something as extravagant as home remodeling just doesn’t make sense for you. It costs so much money and seems like it’s the sort of thing that only well-to-do people would ever want to do.
However, you may actually be glad that you have paid for remodeling once it’s all said and done. The hard truth is that when you remodel your home, you are instantly and drastically improving and increasing its value on the open market. This will make it easier for you to get certain business or personal loans. The home value that you can now take advantage of plays a role in maximizing your net worth! Here are a few ideas to ponder for a remodeling project on your home that could ultimately pay for itself in the long run!
What to Consider
Remodeling a single-family house is an excellent way for homeowners to add increased functionality and beauty to a property. By choosing the right project to enhance your living space, a significant portion of the expense can be passed on to future owners. It creates increased property values. The return on investment of any renovation project is a function and condition of the local residential real estate market. Certain remodeling projects and the quality of the work behind them can dictate the best return. Consider these scenarios:
- Are you looking to Sell your Home? Remodeling can boost the return on investment (ROI) of a house. Wood decks, window replacement, and kitchen and bathroom upgrades tend to generate the highest ROIs.
- Is the Remodel to Upgrade or Repair? For cost recovery, remodeling projects generally must fix a design or structural flaw to earn back construction costs.
- Don’t Overkill on the Remodel: One of the biggest mistakes of remodeling is improving a home well above the average for neighboring houses. Home prices tend to reflect local home buyer’s tastes and the amount they’re willing to pay. More significant renovations are not always better, as spending more does not always ensure more significant value creation.
When Should I Remodel?
The ultimate reason to take on any home remodeling project as an owner-occupant is the enjoyment received from living in an updated home! Deciding when you should renovate your current home isn’t easy. Will this home remodel make life easier? Is there enough space for your family now and as it grows? How big of a factor is cost? There are so many things that many people want to change in their current house. It can sometimes be more cost-effective to remodel than trying to hunt for something else.
If you decide to stay and renovate your current home, the number one thing to do is be organized and make a plan. Many people just jump into wanting to renovate right away. Bad idea! The first thing you need to do is to make sure the house is safe. That means that if there are any structural issues or other concerns, it should be taken care of before starting a project. Have a professional service come to your home for a consultation and discuss options with you. The remodeling process may be something simple you can do on your own, or you may need to hire contractors for bigger projects to undertake.
Where Do I Start First?
When contemplating a remodeling project, homeowners should consider the value they will receive from the project over any cost recovery. However, if you plan to sell, value and cost recovery should be weighed equally. The local real estate guides can determine which projects will most likely pay for themselves. As mentioned before, bigger is not always better, and spending more does not always ensure greater value creation. Home prices will always reflect local property buyers’ tastes and the amounts those buyers are willing to pay in a particular neighborhood or subdivision.
Remodeling improvements, such as office and bedrooms, have the largest recovery ranges, from 50-70% typically. Here are a few other home remodel suggestions to consider in order to see big returns on investment numbers!
- Kitchen Remodel: A minor kitchen remodel will give you more bang for your buck — at least when it comes to selling your home. It will generally re-coup about 75% of the cost on a minor remodel. However, if you have the means to do a major kitchen upgrade and don’t plan to sell right away, the remodel could increase your home’s value by 25% down the road.
- Basement Remodel: A bit more expensive than a minor kitchen remodel. However, you’ll generally see better results, with an average 30% increase in your home’s resale value.
- Deck or Backyard Upgrades: Have you dreamed of having a nice wood deck or patio area out back? An appealing backyard renovation provides a decent value for your money. On average, homeowners recoup about 77% of their costs and increase the home resale value by about 10%. If you plan to enjoy the backyard for a few more years, make sure that you maintain the deck or patio area so that it still looks nice when it comes time to sell your home.
Remodeling your home or property can ultimately pay for itself if you do your numbers right! RP Idaho can help – If you are looking to remodel, contact RP Idaho today for more information or a home consultation!