The best and most valuable home improvement idea will reward your investments of money and time with higher home value now and at the time you sell your home. In each of the past 15 years, over one million homeowners spent more than $10,000 on a kitchen, bath or other major remodeling project, according to Harvard University’s Joint Center for Housing Studies. And experts say such home improvements are generally a good investment.
But tackling a home improvement idea does not always mean an increase in the value of your home. While some projects will increase a home’s value, others may have the same payback as a losing lottery ticket. Before you open your checkbook, there are a few things you should consider to make sure the end result produces a return on your investment–in both time and money.
Value check: Before deciding how much to spend on a major improvement, get an estimate of the current value of your home. With such websites as AOL Real Estate, you can get started by entering your street address to get a current estimate of what your house might sell for in today’s market, as well as the prices that similar homes have recently sold for in your neighborhood. By comparing these prices with renovation estimates, you’ll avoid over-improving your home in relation to the neighborhood, a common and costly mistake. The best home improvement idea adds value while keeping your home price competitive for the neighborhood.
Motive check: Basically, there are two reasons to make major home improvements: pleasure or necessity. If you’re not planning to move for 10 years or more, you’ll have more time to enjoy your improvements and might not be as concerned about getting a return on the investment. However, if you’re improving your home to ultimately add to its resale value, you’ll need to prioritize and focus on the improvements that will pay off at sale time.
Reality check: Before calling in contractors, get a realistic estimate of what your project might cost by using one of the many available online cost estimators. Most provide an approximate cost of the most common home improvement projects along with data localized to your zip code to adjust for geographic cost differences.
Profit check: According to the National Association of the Remodeling Industry, the top five remodeling projects are kitchens, baths, other interior rooms, additions and window replacement. And Remodeling Online reports that even though the average minor kitchen remodel will cost about $15,000, you’ll see a return on that investment of 88 percent. Plus, fixing up that tired bathroom can deliver an 81 percent return if the house is sold within one year from the time the work is completed.