Real Estate Market: Remodeling- Did You Make the Right Choice?

 

By Amanda Serra
 
Real estate is one of the best, if not the very best, investment you can make. Even with less risk, you can still gain a big return on your investment.  Generally speaking, there are several factors that impact whether (and how much) a home will appreciate in value.  The economy and the region of the country you live in are just two of these factors, ones we have no control over. What we can control, however, are things like:
  • How long to own the property and when is the best time to sell
  • The money we decide to put into our home
    • How much and what improvements we decide to make can determine whether or not there is a gain in our investment
                                             What it comes down to is being selective with how much money we put into the house and for what purpose. As someone fairly new to real estate I have been amazed by the disconnect between what consumers think will add value to their homes and what will add value. It also amazes me that some consumers never consult an expert, a.k.a their real estate agents, for advice.  Right now, for example, I would love to add crown molding throughout my house.  While I like the character that it would add, I know it would not add enough value to justify the expense. While an update may be important to you, you must think about the cost vs. the return.  Check out this great chart that offers estimated returns based on project and the region you live in. The interactive chart illustrates that, in certain cases, what consumers think will bring a return does not. It would seem like a no-brainer that a bathroom remodel would bring more value to your home, right?  Sadly, that “no-brainer” is WRONG. In the southeast for example, the return is only 71% of the cost of project. While a bathroom remodel might make your home sell faster than similar homes in the neighborhood it will not increase the value of your home substantially enough to justify the cost. Surprisingly, according to this chart, what brought more than a 100% return, an almost 128% increase to be exact, is replacing the front door. WOW! It appears that, contrary to popular belief, when it comes to remodeling, the simple things matter most. Because of this and that fact that remodeling trends are always shifting, it is important to consult an expert- a real estate professional.

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