For those who remodel, the average amortization on the resale value of a home is 56 percent of the cost of remodeling, but for those who replaced things like garage doors or windows, the payback is 75 percent much higher. That's according to real estate professionals surveyed by the magazine. Almost any project has the potential to adversely affect resale value. A general rule of thumb is that the more personal your choices are, meaning they are made to fit your particular lifestyle or taste, the less likely they are to have a positive effect on resale value.
The bottom line is that any excessive customization of your home can lead to a decrease in value. Yes, you want to live in a space you love, but think twice before investing in major or expensive renovations. And always make sure your home improvements are completed with proper permits from licensed professionals. More than 70 percent of buyers who purchased existing homes knew what they were going to remodel even before they closed the deal, according to the HanleyWood Home Continuity Study, conducted in 2002 with the Harvard Joint Center for Housing Studies.
If you're considering remodeling, especially for the purpose of selling your home, it's a good idea to start with an online home improvement calculator. Very few housing projects break even in terms of home value, while overdoing a remodeling can put a house off the market. Some of the best home improvements think that a renovated kitchen, a new terrace, or a remodeled bathroom can be expensive. The main reason for undertaking any home remodeling project as an owner-occupant is the enjoyment you receive from living in a renovated home.
If you plan to continue living in your home for some time after the renovation, you may want to think more about kitchen remodeling. If you look strictly at the numbers, most remodeling done on a home should be for personal enjoyment, because you are unlikely to get all your money back when you sell the property. Many other housing projects require permits, including roofing work, window replacement, terrace construction, fence installation, kitchen or bathroom remodeling, and electrical work. To pay for home improvements, consider applying for a home remodeling or home repair loan, which are unsecured personal loans you can get through a bank, credit union, or online lender.
Remodeling your home increases your enjoyment, but it can also increase the value of your home over time. Renovating, remodeling, and upgrading your home can be great ways to give it a makeover, gain extra space, or make it possible for you to stay in one place longer. The increase in the value of upgrades varies; anything electrical you do, such as upgrading wiring or adding a cost-effective cooling system, can increase the value of your home substantially and will be reflected in your evaluation, while aesthetic improvements may not affect value as much.
