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To Remodel or Not to Remodel... THAT is the Question

By
Real Estate Agent with Exit Realty Metro | Minneapolis Real Estate

It is a great question to ask before going ahead with it only to find out later it wasn't worth the dust, the inconvenience or most importantly, the MONEY. 

Property investors and home owners can definitely boost the value of their properties through home improvements. Renovating has increased in popularity over the last decade and we see more and more of the “golden oldies” needing some major help.

I always ask my clients to make a list of the reasons they have for renovating, and also a list of what they have in mind. I then interview them to find out what their future plans include (such as how long they plan to live in the home) and to find out what they value as important to their lifestyle. In the end, the goal for me is to help people reach decisions by knowing what the cost verses rewards can be.

In many cases, owners are now spending more on the renovations than on the purchase of the property. Then again, sometimes a little paint will go a long way. Bearing this in mind, it is important to get it right if selling your property in the near future is what you have in mind. By doing it right, you could be handsomely rewarded.

Renovations must be done in such a way that it suits the taste of the next buyer. But this is not where it ends;

·      Do your homework.

 

·      Do market research.

 

·      Consider your options and how your actions could influence the resale value of your property. The golden question, is it worth your while to renovate

 

·      Money spent on renovations must be recouped when you sell your investment.

 

·      If your consider extending you should make sure if it will not be more viable to sell and buy a bigger property.


·      Seek advice from a real estate agent or appraiser.

 

·      Take a good look to see if the basic structure, foundation etc. of your property is sound before you start any renovation. For example, it does not  help spending money on renovating your kitchen if the roof of the property is leaking.

 

·      Cap the amount that you will be spending on your renovations and the easiest way to do this is to find out what the best house in your street  would sell for. Use this as your guide as to the maximum you should spend. According to one of the financial institutions, a home more than 15%-   20% pricier than other properties in its neighborhood will be unlikely to sell as buyers can get property in a better area for a similar amount.

 

·      In this instance of renovation, it is not location that will count but, rather, impression.. impression.. impression!

 

·      Be aware of trends in your area as particular renovations can add value in certain areas. Building a swimming pool might work in one area and not   in another.

 

·      Decide on the style and make sure that it suits the original style of the property.

 

·      Don’t underestimate the true costs of renovating. Get several quotes for the work beforehand.

 

·      Make sure that what you do is done correctly, in a professional manner and up to local building codes and standards.

 

·      Keep receipts and warrantees on file to show prospective buyers.

 

If you are not considering renovations with selling in the near future, you should give it careful thought. Think about your future, and what you will be needing. Will you need extra rooms for planning a family? Will stairs work when growing older?

Where to start?

Clean and good looking is what buyers are looking for. Forget building a swimming pool the experts warns us. For the best return on your investment you should invest in renovations in the kitchen, bathrooms and garages. According to appraisers and real estate agents, the most notable areas for improvement are beautiful bathrooms, modern kitchens and garage space as these are the features that sell homes and grow value, and if homeowners are going to spend money on renovations it should be in these areas. After all, who has the last say, the husband or the wife?


Feel free to visit my website at http://www.chrisdeutsch.com/seller_resources to find more resources for homeowners, buyers and sellers.

Remember, your house is your biggest investment, so… if you are going to do it, do it right!

Comments (2)

Anonymous
Dan Deutsch
In answer to your question.... in my house the husband has the final say.... and the final say is "yes, dear"
Jan 26, 2007 12:55 AM
#1
Anonymous
Mike and Peggy Linton
Avoid Common Renovation Mistakes
By : James Klobasa   4 or more times read
Submitted 2007-01-31 15:58:39
Renovations begin but each victory only reveals more problems with the house. Toward the end of the movie, the couple is left hopeless, broke, and with a house that is in ruins. While this is only a movie, stories like this happens everyday in real estate investing.

Since failed real estate investments are no laughing matter unless they are seen on the big screen, avoiding disaster is the key to success in real estate investing. You start doing this on day one when you begin to browse properties looking for the perfect opportunity. But even the perfect opportunity can turn sour if you don't know how to avoid mistakes during the renovation process.

The number one renovation mistake made in real estate investing is hiring an incompetent contractor. You should always check and double check references, but more importantly you should make sure that you can communicate with your contractor. I once saw an investment ruined by a contractor that thought that he was supposed to gut the house during demolition when he was really supposed to scratch at the surface and salvage what he could. When the investor arrived to see what had happened, she had no option but to redo the entire house and hope that she broke even.

Another common real estate investing mistake that is commonly made during the renovation process is to take on too many structural changes. These changes usually don't earn a great return on your investment and they drain the budget and eat up valuable time. Granted, removing a wall or two can really open up a floor plan and make your property sell quickly. These are the types of structural changes that you should go for while avoiding ones that serve no purpose.

You should always stay true to a home's style when renovating for the purpose of real estate investing. This means that you should avoid putting a New York City loft in an Arts and Crafts bungalow. Keep in mind that people who look to buy a house of a certain style want that house to be true to character. Therefore, don't change the character of the house during renovations. Enhance it instead.

When renovating a house that you wish to sell to someone else, you should strive to make the changes neutral and impersonal. Avoid infusing your personality and decorating tastes into an investment because they might not be tastes shared with your potential buyers.

The renovation process is where you make the money in real estate investing, but it is also where you can lose a great deal of money. Strive to stay on schedule and on budget, and don't be afraid to ask others for their opinion before you make any final decisions.
Author Resource:- James Klobasa, once broke with no job and $20,000 in debt made a choice that changed his life forever. That choice was investing in Real Estate. With the founder of, The Little Building Co. you too, can learn at Real-Real Estate Investing
Article From Daytona Beach Business News
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Feb 03, 2007 11:36 PM
#2