If you are planning to do a remodel project, it is important to consider whether or not the expense will be worth it or not. This is especially true if you plan to put the home on the market in the near future.
•1. Who will provide the labor? One of the biggest expenses in a remodel project is the cost of the labor. If you will be able to provide some or all of the labor for the project. You are more likely to have a project that adds more value than cost to your home.
•2. Updates needed. If your home is looking dated, especially in the kitchen and bath areas, remodels of these areas will definitely help your home sell. You may not get a full return on your investment costs, but it should not sit on the market as long if updates have been made.
•3. Finish the unfinished. If you have an unfinished basement, a remodel which finishes off some portions of the basement can greatly increase the value of your home. You will be able to list your home with that much more ‘finished' living space.
•4. Improved curb appeal. The first impression of a home when a person drives up is a key factor in selling a home. If your remodel makes a significant improvement on this aspect of your home, it is more likely to be worth the investment.
•5. Special deals. Do you have access to some incredible prices on appliances, flooring or plumbing fixtures? If you know that you will be able to accomplish the remodel at a significantly lower price because of special deals on materials, this can mean the difference between adding value or simply adding costs to your home.
•6. Added value. As mentioned several times already, the key is to add more value to your home than you do costs. Most remodels do not recoup 100% of their costs. In other words, they do not add the same amount of value to the home as they do in costs.
•7. Cost vs Value Report. In 2005 a report was generated that compared the costs of several different types of remodels with the value added to the home. It also listed the information as it related to different areas of the country. This report can give you some general guidelines as to which types of remodel projects are the most profitable. It can be found online at: www.realtor.org.
•8. Real Estate Appraisal - Real estate appraisers have a list of values that they use for determining a home's overall market value. A real estate appraiser would be able to give you an idea how much value a particular remodel project would add to your home.
•9. Energy savings. If your remodel involves items that will save energy costs, you can generally determine the amount of energy savings over a year's time and then extend those savings into the future to see how long it will be before the energy savings have paid for the costs of the remodel.
•10. Personal use. Will the remodel improve your enjoyment of your home? This is a difficult area to put a value figure to. It is always important to remodel in a way that you will appreciate and not just for sales value.
Your initial reason for doing the remodel project will play heavily into whether or not the project is worth the costs. Weigh out the factors listed above before making the decision.
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