Before you undertake a home remodeling project, there are a few things to consider.
How long do you plan to remain in your home? How will your remodeling project affect the resale value if you plan to move within the next few years? The remodeling project that seems wonderful to you may not be considered a value-added project for potential buyers.
Keep within the bounds of your neighborhood. For example, a $50,000 home theatre is neat to have, but if you live in a $100K-$200K neighborhood, this will not add much to your resale value, as you are outpacing and outpricing the area in which you live.
Similarly, game rooms, saunas, pool and bars generally have much lower resale values, since these aren’t every homeowner’s cup of tea. If you plan to remain in your home for years to come and want to enjoy such amenities, they can be a great add-on. If, however, you anticipate moving within two or three years or your career might easily take you to another city, these won’t be great investments.
Home offices, screened porches and refurbished basements are somewhat better choices, but experts advise using caution when undertaking projects such as these. The return on investment is higher; some of these are partially tax deductible, and trends indicate a greater appeal for these items. However, the general rule is to stick with the traditional; check with local furniture stores or even local realtors before adding something avant garde or unique.
Decks, fences and bathrooms are better value-added remodeling projects, increasing your home’s appeal and averaging an 80-90% return on investment. Some of these are costlier undertakings, but compensate by increasing a property’s functionality.
Kitchens and bathrooms are considered the absolute top-of-the-line upgrades, with a return on investment somewhere around the 100-110% level. Though again, analysts recommend caution. Don’t outprice your home by installing appliances or high-end materials that far outstrip other homes in the area if there’s a good chance you won’t be staying there long enough to take full advantage of them.
Bottom line, of course, is to go with what your heart desires and what your pocketbook can tolerate. But it’s always a good idea to proceed with caution and only after having done some careful research.