January is always a month for making big plans. And some of the biggest plans you can make are to move or upgrade your home. This is why January can be a big month for real estate, as many homeowners ponder the question, "Should I stay or should I go now?"
Since your home is a major source of one's personal happiness, this is an important decision. And I would suggest you talk this through with a real estate agent that can help you weigh the pros and cons of both decisions.
The focus of this blog is to help you make good choices if you are thinking of remodeling. Here is some of my advice that I give my clients:
This is an eye openning report for many home owners. Remodeling.hw.net produces this report annually and considers City Job Costs, City Resale Value, City Cost Recouped, City/Region Comparison and City/National Comparison for the report.
The question always asked with regards to updating or upgrading is, "will I add value to my home?" My answer is that you will add value, yet you may not get a positive return on investment (so, if you remodeled and then decided to sell your home, you will most likely break even (or less) on your investment). This aspect changes the longer you own your home, of course, and can factor in appreciation and higher equity into the equation.
2. Study the market before you make selections.
This mistake can really cost effect your invesment (in a couple of different ways). When you make wrong taste specific choices that the market is going to reject when you sell your home (for instance, you love purple and decide to put purple tile everywhere), then you are setting yourself up to lose money on your update. This is where studying the sold homes in your neighborhood and the color and type of tile used and how the market responded is important.
Similar scenario with over-improvement. For example, do not put travertine tile in your home when vinyl is the standard, you are most likely not going to add value to your home this way (ok, well, you may add value, yet if you had to sell it, you are not going to find a buyer willing to pay more for it.)
History often repeats itself in our business. So if you see a home with purple tile on the foreclosure list, well then you know what to expect. On the opposite side of this spectrum, an updated home raises the bar and value for other homes in the market, then copy what this home is doing and you will most likely experience the same results!
3. The Stress Factor
If you talk to anyone that has done a remodeling project (whether it by DIY or hiring a contractor), get ready to hear a story. I've heard many couples say that they wish they had found a home that was already remodeled. Dealing with dust, contractors and delays is not fun (and unfortunately, it's the norm). And at this time in the market, the contractors have increased prices so much (due to demand and cost of materials), that it may just make more sense to find a place already redone. With current interest rates, buying power is high. Let the investors take on the stress or remodeling and take advantage of the market of the moment.
The other point I want to make here is to avoid the over-haul remodel if at all possible. This saying is not pretty, yet it makes the point: try and put "lipstick on a pig" first. For instance, try replacing a light fixture or sink fixture and adding paint, rather than redoing the whole bathroom. Making small replacements is a much safer way to upgrade than paying for a large remodel with regards to investment.
I hope you found this inforamation helpful! Please subscribe or leave comments. And let me know if you would like me to help you analyze your next home improvement project.
Laura Ivy Blessing blogs about the Austin, TX known and lesser known happenings with a splash of real estate savvy for today's buyers and sellers. Please call her today to consult and advise you through your next real estate transaction. Blessing@KW.com