Home remodeling used to be all about the pizzazz of granite countertops and marble floors, but in today’s world the focus is on payback. If you spend $10,000, $20,000 or even $50,000, will you get it back….and when?
While the housing market is rebounding in many areas, it’s wise to invest your remodeling dollars carefully. Modest remodeling projects, such as bathroom updates versus full blown overhauls, will fare better than extravagant projects, according to Remodeling Magazine’s Cost Versus Value Report covering 35 remodeling projects.
You can safeguard your investment by focusing on:
- Simple, tasteful and somewhat neutral kitchen and bathroom updates. This means replacing countertops, sinks and faucets, and doing cabinet refacing instead of buying new.
- Bathroom updating. Ditto on new finishes, then toss in tub refinishing ($300 to $400) versus gutting the room and buying a large soaker tub (thousands!).
- Limiting structural changes, such as moving walls and gutting rooms.
- Keeping plumbing and electrical changes to a minimum.
- Remodeling existing space versus building an addition, which requires zoning approval, a new foundation, expanding your heating and cooling systems, etc.
If you’re planning to sell your home in the next few years, talk with a local real estate agent about what buyers expect and what they’ll pay for. You might want a finished basement for the kids, but according to this handy calculator from CNN, your payback will be around 78.8 percent.
In the end, you’ll have to weigh the cost and payback against your needs and time horizon for selling. For example, basement remodeling makes sense if:
- You’re cramped for space and don’t want to move for 5 or more years.
- You need a private retreat for an in-law or returning college student.
- You have at least 8-feet of ceiling height and no water problems.
Just don’t spring for the backup power generator. If you’re in New England, the job might cost you $15,617, according to Remodeling Magazine. The payback? A paltry $7,240 or 46.4%.
Just think of all the candles you could buy instead!