Friday, August 21, 2015

Best & Worst Home Improvements for ROI

If you’re an HGTV home remodeling shows addict like I am, you’ll agree that most home renovations are an added value. However unless you’re planning on keeping your home forever, that’s simply not the case.  In fact most renovations these days are mostly done to increase home value because of the booming real estate market. Considering all the time and hard work that goes into these upgrades, you would expect the value of your home to increase, but that’s not always the case.

I’ve read many articles on this subject, and the consensus seems to be that you’re more likely to recoup more of your investment with basic home maintenance than you are with big budget additions. But before you abandon HGTV and nix all your home remodeling plans, there are some bigger budget additions that are well worth it. This depends on factors such as the age and condition of the entire home, the location, and the type of addition you’re making.   

After doing some research, and speaking to some real estate agents, below are the 5 best and 5 worst home renovations you can make if ROI is a concern.

Top 5 Best Home Improvements

  • Attic Bedroom - converting an unused attic into an extra room which can be used as a bedroom, craft room, or an office has shown to have a high return on investment.
  • Hard Wood Floors - if you have wall to wall carpeting you should really look into installing hard wood floors. If you already have them under the carpeting, have them refinished.
  • Wood Deck Addition - there's really no need to explain this one. Who wouldn't want a deck for in their new home for grilling and entertaining during the warm weather?
  • Minor Kitchen Remodeling - Upgrade appliances for high efficiency, reface cabinet doors and replace laminate counters.
  • Exterior Siding & Roofing Replacement - For potential buyers, knowing that they will not have to make those expensive upgrades anytime soon is a huge selling point.

Top 5 Worst Home Improvements
  • Swimming Pool or Hot Tub - These aren't attractive features to everyone. In fact for most people they are viewed as energy guzzlers.
  • Garage Addition - If it's not already there, don't have it built. This addition doesn't not have a high ROI.
  • New Windows - Installing new windows can be quite expensive. If they are operational, and just need caulk around the cracks, storm windows or weatherstripping, they can still be energy efficient and cost you a lot less to repair.
  • Wallpaper, Paint Fixtures & Ornate Chandeliers - Each buyer has their own taste, keep it simple.
  • Home Office Remodel - If you have an extra room, don't spend the money to turn it into a home office if you're selling your home. For obvious reason the ROI on that can be quite low, the buyer may choose to turn that home office into another bedroom or a craft room.
I'm sure some of you will disagree with me on this list, this is only meant for home owners who are looking to sell. If you're interested in making upgrades to your homes without selling it, you may want to look into a cash out refinance to cover the costs.

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