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Is This a Good Investment?

There are a number of reasons for embarking on a Renovation project; a growing family, changing tastes, budding hobbies and entrepreneurial explorations are among them. With many of these reasons a secondary question usually looms in the back of most homeowner's minds. Will I be able to get my investment back out of the house at resale?

Unfortunately, this is a simple question without a simple answer. Many factors affect the answer. Updated kitchens and baths are always popular with home buyers but will a full kitchen remodel or a less extensive "face lift" pay back more in a dollar for dollar analysis? French County is your favorite style and it's represented in every home style magazine on the newsstand but will it be out of vogue in 10 years? Real estate prices in your neighborhood have consistently run ahead of the pace of the rest of the City. But are they reaching a plateau, or worse a ceiling? And the questions don't stop there.

However homeowners should find comfort in the fact that, according to local remodeling figures from 2007, even in a softening real estate market many of the most popular renovation projects should be able to return 70 to 80 cents on the dollar. And using a conservative figure for appreciation may even be able to break even in just 5 years.

Posted by Jeff Echols, CGP on 03/09/2008 09:53 PM

Comments (6)

investment, renovation, updated, homeowners, appreciation

6 Comments on Is This a Good Investment?

MAR

2008

Hi Jeff - While remodeling be sure and check in with the USGBC Green Home Guide for ways to remodel GREEN and with energy efficiency! Might as well make these upgrades at the same time so the project will pay itself back over time!

Mary,

Absolutely, good point. Although "green" should be a systems approach, it is a good idea to see how you can implement green products, devices and equipment incrementally.

Thanks

Jeff,

as usual an eye-opening entry. It does pay to remodel your house in a 'green' fashion if it allows the home to keep up 70% of its original price (return on the dollar invested). Awesome.

Hi Jeff, I agree with Mary look for ways to incorporate energy efficiency into every remodel job. After all whats Greener than updating an existing home with energy efficient improvements.

Thanks Doug,

And it should be noted that some of the major components of "green" design are aimed at reducing life-cycle and maintenance cost and, of course, resource efficiency. Those are dollars that you should be able to factor in on top of the return.

Gary and Mary,

You are definately on the right track. If you have a chance, you may be interested in reading my post "With All Due Respect Kermit, It Is Easy Being Green." I reinforces exactly what you are saying. Anytime that you replace something, whether it be a light bulb or your water heater, use a green alternative. Sure, a Compact Florescent costs more than an incandescent bulb, but the Life Cycle cost are so much lower that you'll more than make up for it in the long run. That's the way it is with many of the green alternatives.

Thanks for the great comments.

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