According to Remodeling Magazine’s 2006 “Cost vs. Value “ report, the cost for most remodeling projects in 2006 increased while the return on investment decreased. Apparently, a mid-range kitchen remodel with an average cost of $54,000 only returned 80.4% versus a 91% return on $43,862 in 2005.
How can a homeowner increase their property value? From our experience consulting homeowners and investors, we strongly advise them to research the property improvements of other houses in the neighborhood. Know what improvements and the quality of the improvements neighbors are making to their homes. For example, if you are installing two inch slab granite countertops and everyone else has Formica laminate countertops, chances are that you will not realize a return on your investment.
Typically, you will want to focus on areas that are most important to buyers – foyer flooring, the kitchen, bathrooms, two-tone interior paint and cleaning exterior finishes and landscaping. It is best to avoid renovations to master suites, sun rooms and even office additions.
The most important factor to consider before starting a home improvement project is to analyze your local real estate market within your neighborhood in Colorado. Some neighborhoods around the Colorado real estate market are experiencing a significant return-on-investment with home improvement projects, whereas other home improvement projects are seen as an over-improvement for the community.
As always, identify and work with a Colorado real estate agent that has experience in the real estate investment market and skilled in determining what home improvement projects yield the highest return-on-investment for your local market.
Damon and Josh are co-founders of Colorado House Finders, a full-service resource for real estate in Colorado. Their dedication to customer service and knowledge of the Colorado real estate market make them the smart choice when thinking about a move to Colorado.