Remodeling Payback


Millions of homeowners have taken advantage of low mortgage and home equity loan interest rates to make home improvements or remodel their homes over the last several years. When they sell their homes, many of them are unable to recoup the money they put into the improvements. Not all home improvements are created equal, so how do you know which ones will pay you back the money you put into them?
Home improvement payback values vary widely by region and even by neighborhood. In general, expect to recoup less of your investment in a slow real estate market than you would in a hotter real estate market where houses are appreciating rapidly in value.

One of the most popular projects, finishing your basement, has one of the lowest rates of return,. The average payback for finishing a basement is less than 50% of your costs, so if you spend $10,000, you can expect to increase the value of your home at resale by less than $5,000; the other $5,000 comes out of your pocket.

Kitchen remodeling and bathroom additions often pay back 75% to 90% or more of your costs. In-ground pools end up being notoriously bad investments, averaging a payback of less than 10%. Whirlpool baths, fireplaces, and decks don't fare much better. Remember that what's important to you may not be important to a potential buyer.

Improvements that potential buyers are most likely to be willing to pay for include:


- Adding or remodeling a bathroom
- Kitchen improvements
- Adding a room
- Landscaping
- Adding a bedroom
- Adding a garage


Choosing your Contractor:

Choosing your Contractor is one of many decisions to be made when you are remodeling your home, whether it’s a small or large project. How do you choose your contractor? First, your contractor should have a proven track record with available references and a comprehensive portfolio of successful projects.  Second, consider if his/her background includes hands-on experience rather than project management-based knowledge. Many of today’s contractors come to home remodeling with little or no background in the field. Although some of them become qualified contractors over time, they may never gain the insight acquired from identifying a problem and seeing it through to the final repair.Troubleshooting & cost effective design comes only from hands-on experience with various remodeling applications.