Managing Your Investment in Home Addition and Remodeling Projects

What are the decision parameters that you must take into account when planning to invest on home remodeling or home addition? How are you going to go about the home improvement project? Before you begin with your home addition or remodeling project it is important that you perform the necessary research to be able to gather the essential information needed in making a sound decision. The most important aspect of your decision will have to be the financial implications of your options. Specifically, you need to look at the ROI of your home improvement alternatives for, at the end of the day, the success of your home improvement project will be based on how much you can recoup from what you have spent for such projects.

Of course, you best option would be the home improvement project that can deliver a 100% return on investment. The bottom-line, when it comes to home improvement alternatives, is the added value to your real estate property. This is the main reason why it is extremely important that you work on your numbers first before you start discussing your home improvement plans with your contractor.

ROI of Home Improvement Projects

Remodeling and additions are normally included in your range of options if you are planning to stay in your current home for at least five to ten years. One of the most common errors by homeowners is that they see home improvement projects as purely an undertaking that will increase the resale value of their home. There is not even a single home improvement option that can guarantee a 100% return on investment. Homeowners must start thinking out of the box and include in the equation long term benefits of home improvement alternatives. You must also remember that you are limited to minor home improvement projects if your primary goal is to sell the house.

Here is a list of probable financial returns of the most common home improvement categories. The figures were culled from multiple sources and were based on homes in major cities across the country.

• Minor kitchen improvement – 125%
• Basement remodeling – 98%
• Bathroom improvement – 96%
• Large scale kitchen improvement – 92%
• Home exterior repainting – 90%
• Master bedroom improvement – 86%

In general, the kitchen and the bathroom are the best areas where home improvement projects are undertaken in as far as financial returns are concerned. The master bedroom can also give you some good numbers with proper planning and execution of your home improvement plans.
Nonetheless, you will have to carefully make your final decision based on your goals and priorities.

Don’t Forget Curb Appeal

Curb appeal should not be left out in the overall scheme of things. You must not underestimate the impact of exterior repainting on the intrinsic value of your home. In most markets, this aspect of home improvement account for decent financial returns. There are other critical aspects of curb appeal that you have to cover when planning your home improvement project. While exterior repainting is one of the basic tasks that must be done when sprucing up your home, you must also think of the other essentials that need to be done to ensure that your home can grab the attention of potential buyers.

Preserve the Core Design of your Home

When preparing the plan for your home improvement, it is vital that you consider home improvement aspects which are consistent with the prevailing design trend and style of other homes in your neighborhood. It is important that any improvement or enhancement that you undertake in your home is consistent with what other homes in your neighborhood have.

Any elaborate home remodeling or addition that is significantly in contrast with the designs and styles of other home properties on the block will make your home to stick out in the most incongruous way, and this can have a significant negating impact on its value.

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