It used to be that when you renovated some portion of your home, the home's value would increase.
Things aren't quite the same now.
A recent survey by Remodeling Magazine, a periodical for builders, publishes an annual survey of the value of home improvements.
The depressing results include the following examples: An upscale bathroom remodel cost about $51,000 in 2007 but homeowners could expect to recover only about $35,000 or 68% of the cost. Spend $220,000 on a new master bedroom suite, recoup just $141,000 (64%). Drop $109,000 on a new kitchen, make back just $81,000 (74%).
Most remodeling has gone far off the scale of being reasonable, especially if the primary purpose is financial. Custom built kitchen cabinets, granite counters and top-of-the-line restauarnt-style appliances look fantastic, but there are plenty of more modest and affordable alternative. And they will still sell your home if that's the intention.
Don't try to keep up with the neighbours. Unless you are remodelling to put it up for immediate sale, there is no valid financial argument for remodeling just to keep on par with The Jones'. In fact, if you're not moving out anytime soon, save the expensive reno's for when you do plan to sell. Then, at least, they will new. There's nothing worse than viewing a home that was "renovated" only to find the reno's are a decade old. To most buyers, a "renovated home" means a modern home...modern at the time of viewing.
excerpted from "The Wall Street Journal Complete Home Owner's Guidebook" by David Crook
Robert J. Morrow is editor of www.HamiltonHomeReview.com, an online real estate magazine serving Greater Hamilton, Ontario. Click here for a FREE SUBSCRIPTION sent to your email monthly. Click here to receive new Hamilton area listings in your email daily.
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