One
of the best things that you can do with your
home equity is use it to reinvest in your home.
This can truly be a "win–win" situation: You enjoy
the benefit of an improved living space, and increase
your home's value at the same time.
Choose
Wisely
However,
not every project will increase the resale value of
your home, and some projects give a better
return–on–investment (ROI) than others.
Be sure to choose wisely when making home improvements,
especially if your goal is to increase the value of
your home.
Here's how Remodeling Magazine
rates home improvement projects in terms of one–year
return–on–investment:
|
Project |
ROI
|
Average
Price Tag |
|
Minor
kitchen remodel (painting,
repairs, etc.) |
88% |
$8,655 |
|
Second–story
addition |
83% |
$73,553 |
|
Bathroom
remodel |
81% |
$9,135 |
|
Bathroom
addition |
81% |
$13,918 |
|
Family
room addition |
75% |
$30,960 |
|
Major
kitchen remodel (new
floors, new cabinets, etc.) |
71% |
$31,090 |
|
Deck |
55% |
$8,022 |
As
you can see, remodeling your kitchen and bathrooms are
probably the best home improvements you can make to
increase your home's value and generate a solid ROI.
Don't
Overdo It
It's
always best to make home improvements for you, not for
your home's value. After all, you are the one who will
enjoy the improvements while you live in the home.
However,
if you are making home improvements to increase your
home's resale value, here are a few things to consider:
- Don't
make home improvements that are "over the top" in
relation to your neighbors homes. If you do, it may
be harder to recover the costs of these improvements
when you sell.
- Choosing
more expensive flooring or fixtures will not necessarily
increase your home's value when you sell the home.
In fact, it may make it more difficult to sell.
- If
you have eclectic tastes, what you like won't necessarily
appeal to mainstream home buyers. Bold colors and
eccentric–looking improvements may turn them
off to your home. If you are thinking of selling your
home in the next few years, consider a more neutral
look.
|
