Remodeling? Flipping? You Need to Read This

by Rich Schiffer, Weichert Realtors 

When selling your home, there are two key concepts to getting it sold for the best price that the market will bear:

1. Price it according to market conditions.
2. Update it to market standards. 

This article focusses on #2. 

Whether you are an Investor buying properties to "flip" or a homeowner who wants their home to be positioned to sell quickly, you need to know how much of your investment you stand to recoup for any particular remodeling project.  To that end, you should familiarize yourself with the results of the 2007 Cost vs. Value Report, by RemodelingOnline which has just been released.  It shows some very interesting results.  This year's report is more "user friendly" than ones I have seen in the past.  It is sortable, and includes regional and city data, as well as the national averages.

Charts showing the results from the past 5 years are also available.  Interestingly, the project recoup % for remodelling seems to have peaked in 2005.  I say "interestingly", not "surprisingly", since that year also marked what some are touting as the "peak" of the recent boom.  The cost of remodeling may have gone up in the past two years, but the amount a homeowner may expect to to recoup for each project has actually slightly decreased. 

It will be even more interesting to look at individual markets, and see if the project recoup % has fallen at or about the same rate that home prices have in those markets.  Before jumping in to a remodeling project, I strongly recommend that you consult with a local REALTOR who can provide you with an analysis of the price trends in your local market.

To view the full Remodeling Cost vs. Value Report 2007, click the logo above, or visit http://www.costvsvalue.com/index.html.  (You can view the general data, but to view city-specific data, you may be required to register on their site.)

Other Tips for Home Sellers articles can be found here