Maine Coast Home Design

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Introduction

What is remodeling?

Remodeling is updating or altering the appearance and functional utility of a building.Home remodeling is big business. It accounts for about 40% of all residential construction spending and about 2% of the U.S. economy.

So to answer the question “Is it worthwhile to remodel my house?”
Probably; however, there are many factors to consider.

Why Remodel?

First you need to determine what’s your motivation? Why do you want to remodel? Are you remodeling for your self and your families enjoyment or to increase your appraised value?

Second do not expect a full recovery of your remodeling investment. Some estimates are as low as 40 cents on the dollar. Others, depending on what you remodel may recover more than 80%.

When to Remodel?

Other factors that will impact the return on your investment:
1. What sort of economic times are you experiencing? Are you in an up or down market?
2. How long do you tend to stay in the home? The longer the better for a good return on your investment.
3. How’s the housing market in your area? Are you competing against a lot of new tract homes?
4. How will the remodel will impact your appraised value? Find out before you invest your money.
5. How strong is the resale market? Ask a local Realtor for comparable sales for your area.
6. How soon do you plan on selling?
7. Do you plan to sell with full MLS service, FSBO, or Flat Fee MLS?

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Who should remodel?

Ask yourself who will do the remodel?  How good are you at remodeling?
If you’re not really handy, maybe find a friend and barter or trade services.
Are you going to do the work or hire the project out?

If you are considering remodeling, get three bids from local firms. Ask brokers, lenders, and appraisers if the cost of the remodel warrants completion.
The percentage of return on the investment for remodeling will change over time and vary from area to area. Ask the professionals.

Weigh carefully the expense of remodeling based on the return. Do only those projects which will bring you a significantly higher sales price or greater family pleasure.
Improvements and upgrades cause anguish for most sellers, because a seller wants to recover the full dollar value of the improvements. The industry standard suggests you will get back about 40 cents on every dollar. Don’t expect to recover the full amount.

For Example, if you put in improvements totaling ,000, you should expect a net return of approximately ,000. As a seller, you must remember that you put in that nice brick walkway because you wanted it, not for its resale value.

What should you remodel?

Average 2007 cost vs. a value report – average ROI
 Deck           85.4%
 A major kitchen remodel  78.3%
 A bathroom remodel  78.3%

Kitchen and Bath remodels are always safe to consider for good dollar return on your investment.

Know this answer; are you adding something to the home that will bring you and your family pleasure and enjoyment or are you adding something to add value?
Two very different considerations.

Areas of remodel that will bring you only marginal return on your investment are:
1. Home office
2. Sunroom additions
3. Family room additions
4. Master suite additions

Regional differences are also a consideration.

In the West Kitchens and baths are big.
East coast and North leans more to siding, dual pane window and energy types of remodeling.
The South is big on family rooms, sidings, kitchens and replacements.
And the Mid West leans toward kitchens, baths and decks.

Summary

Overall the two normally safe areas to consider upgrading and remodeling for the greatest return on your investment, are bathrooms and kitchens.

You need to answer these questions before you begin:
1. Why are you remodeling?
2. Who will do the remodeling?
3. What are you going to remodel?
4. How long do you plan to stay in the home?
5. How will you pay for the remodel?
6. What return on your investment are you expecting?

If you answer these questions and plan your project, you can probably recoup between 40 and 80 percent of your remodeling costs.

Copyright © Wee Dilts 2009

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