Remodeling Returns IN A SLUGGISH MARKET

In a sluggish housing market, does it make

sense to spend money on remodeling projects?

Probably, according to the 19th annual Cost vs.

Value Report as published in Remodeling Online

(remodeling.hw.net).

According to the report, just as home sales

have undergone a correction after record

growth, the value of home improvements

at the time of resale have adjusted to 2002

levels. In addition, the report indicates that

the norm is achieved when home improvement

costs stay within the range of 20 to 25 cents

on the dollar. The other 75 to 80 cents return

is recouped at the time of sale through increased

resale value.

There are other factors besides cost for

homeowners to consider when thinking about

remodeling projects. While remodeling projects

certainly add value to a home, the return

on investment can be unpredictable based

on factors beyond a homeowner’s control.

These factors can include regional home values,

the overall condition of the home, the value

of comparable homes in the area, and the

existence and cost of new homes in the area.

Homeowners also need to consider the need

for a remodel as a way to improve the home’s

quality and function, as well as their enjoyment

of the finished project.

If the remodel is not an absolute necessity,

such as a plumbing, electrical or HVAC upgrade,

it can be useful to check with a professional

remodeling contractor as well as your favorite

real estate professional before you begin the

project. They can advise you regarding the

return you might realistically expect to

receive on the remodeling project.

However, for most people, the two main

reasons for remodeling their homes do not

include “because it’s a good investment”.

According to an article posted on

Bankrate.com, homeowners typically

undertake a remodeling project to make

their homes more livable and enjoyable

and to update their home’s appearance as

decorating trends come into and go out of

style.

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