While It Is A Common Belief That Any Money You Put Into Your House Will Add Value To It, This Is Not Always The Case

Category: Finance.

How much money you spend on a renovation project really depends on what you plan on getting out of it.

As a seasoned veteran in the remodeling industry, I am constantly being asked the question" What I can do to have the biggest impact on the value of my house? ". Are you doing it to improve your every day way of life, or are you planning on selling your house and want to increase the value. While it is a common belief that any money you put into your house will add value to it, this is not always the case. Regular maintenance can help extend the life of your home but at some point there are things that are going to be replaced. There are really two different reasons that people invest money into their home- General Maintenance/ Upkeep and Visual Improvements. 1) General Maintenance- Projects like replacing your hot water heater, patching a leaky roof, or sealing up, repairing damaged siding cracks in the foundation are not going to show you a return on your investment but they are going to be required to keep up the overall condition of your home. By avoiding repairs or maintenance on items like this will just make the condition worse and will result in even more money being needed for repairs. 2) Visual Improvements- While that sounds very vague, this would be anything that is not structural in nature or not necessarily required.

Projects like renovating a bathroom or a kitchen, finishing off a basement, or even landscaping, adding a deck the yard will not only spruce up your home but they will also add value. This is where investing money into your house is going to pay off. That being said, not all of these projects will yield the same return. Even though the rule thumb says that you will see a return on your investment by renovating a kitchen or bathroom, or by finishing off a basement, that is not always the case. For the same amount of money, finishing off a basement might yield a 20% return on your investment while renovating your kitchen or bathroom could yield a 75- 90% return on your investment. If you are planning on selling your home in the immediate future or down the road, putting too many personal touches on a space can actually have a negative affect.

If the average kitchen in your neighbor is estimated at$ 25, 000 in value and you spend$ 60, 000 on your kitchen, odds are you will have a hard time convincing buyers that the house is worth that much more than your neighbors. The same thing can be said for spending too much on a given space. Adding additional bedrooms or an extra bathroom is always a good investment provided it is not taking space away from other usable space. Sometimes taking a bedroom and cutting it in half will actually take value away from the house if it wasn t big enough to start with. Be careful when taking usable space to create two spaces. It is always a good idea to have a real estate agent give you some advice as to the impact a renovation will have on the value of your home. By investing wisely, you can see some significant returns on your investment, whether it is a more comfortable living space for years to come or a more attractive home for potential homebuyers.