Don't Over Do It With Home Improvements
by Broderick Perkins
The record $233 billion home improvement market represents 40 percent of all residential construction and improvement spending and more than two percent of all expenditures in the U.S. economy, according to Harvard University's Joint Center For Housing Studies. While "The Changing Structure of the Home Remodeling Industry" extols the virtues of home improvements, it doesn't tell you how not to over do it. That's because there's no quick measure to determine what constitutes an over improvement. How much your home improvement gets carried away depends a lot on what job you undertake, what's happening in your neighborhood and, in the end, what the improvement means to you and your family. Measure cost vs. value In terms of your home's resale value, the best home improvements are often cosmetic curb appeal and buyer-appeal type jobs -- a new roof, painting, carpeting, minor kitchen and bath re-dos, a kitchen sky light to brighten an other wise bleak room and other alterations and additions that brings your home in line with the others in the neighborhood. Such improvements increase the value of your home virtually dollar-for-dollar. Otherwise, Remodeling Online's 2004 Cost vs. Value report indicates which larger jobs provide the most return. The percentage return is a national average based on data from 60 cities. Keep in mind, your return begins to diminish over time, typically after the first year, as the improvement ages and gets out of step with contemporary upgrades. Top 10 Cost Vs. Value 2004| Improvement | Return | | Minor Kitchen Remodel | 92.9% | | Siding Replacement | 92.8% | | Bathroom Remodel Mid-Range | 90.1% | | Deck Addition | 86.7% | | Bathroom Addition, Mid-Range | 86.4% | | Bathroom Remodel, Upscale | 85.6% | | Window Replacement, Mid-Range | 84.5% | | Window Replacement, Upscale | 83.7% | | Attic Bedroom | 82.7% | | Bedroom Addition, Upscale | 81.1% | | Roofing Replacement | 80.8% | | Family Room | 80.6% |
Source: Remodeling Online Level The Playing Field Remodeling Online's national report may not account for peculiarities in your neighborhood. Build your home to over achieve in the neighborhood and it could under perform on the resale market. "That means $10,000 spent on a kitchen remodel in a mobile home next to the railroad tracks in a poorly rated school district will not reap the same return as $10,000 spent on a 6-bedroom, hillside home with a view, in a highly rated school district," said Kit Davey, a Redwood City CA-based interior designer, staging specialist and publisher of AFreshLook.Net website. As important as what you do to a house is how you do it, especially if the work is visible from the curb. Any additions should blend in with the home's existing style and design of the homes in your neighborhood. "Improve beyond the market norm and people just will not pay for it," said appraiser Greg Stephens, a vice president with Plano, TX-based LandSafe.Com. the appraisal quality control division of Countywide Home Loans. Nail Some Research To learn what's typical in your neighborhood, roll up your sleeves and do some research. Improving Your Lifestyle Whether or not you over improve is also relative. If remodeling is a lifestyle choice rather than an investment decision, you can stretch. "If you have no intention of moving, then over improve to your heart's delight. If it puts a smile on your face, if it makes you happy, then it's not money it's quality of life," said Cincinnati-based Tim Carter, CEO of Ask the Builder. |
