Your next home improvement project could be a money maker for you. If you’re planning to remodel, the improvement and repair projects you choose could increase the resale value and help your home stand out from others without over-improving it compared to your neighborhood. If you have been planning to sell your home and found that the price for move-in ready homes exceeds your budget, a purchase renovation mortgage might work for you. Home improvement loans and purchase renovation mortgages are essentially the same. They enable you to create your dream home from your existing home or from a fixer-upper.
Here is a guide to the benefits and cost of home improvement projects to help you get the best returns.
Home Improvement: Where to Start
Before taking a sledgehammer to that wall, consider these guidelines:
If you are adding a second-story or changing the exterior look of your home. Your return may not be as high as you thought because the changes may not fit in your neighborhood. An ultra-modern home on a street of Victorians may not get you the highest yield.
- Age of home
If you have an older home from the 1940s through the 1990s and you remodel the kitchen and bathrooms, you will get a higher return than if your improvements were to home recently built.
- Upgrades, what is appropriate
Adding a super contemporary kitchen to a traditionally home may draw too much attention to the fact that the rest of the home needs improvements. Think updated but keep those bathrooms in mind too.
- Price of home
A more expensive home improvement project with over-the-top finishes will get a bigger return in a luxury home than in one that is more moderately priced. In other words, do not go with high-end appliances or fixtures in a home that does not have the price tag to go with it.
Consider working with a contractor, designer or architect before you get started to determine the scope of work that will be required and that will meet your needs and budget. You should even consider calling your Realtor or lender for advise about how much budget is appropriate for your home.
Home Improvement Projects the fetch you the Greatest Returns
When considering which home improvement projects, one should always consider enhancements that anyone can appreciate and deliver the most return. These are typically places within the home that get the most use kitchen, bathroom, and entertainment spaces; along with areas that improve the aesthetic quality of the home. I read a great article called Remodel or replace? Top 10 ROI opportunities in popular home improvement projects by Michael McSorley that suggested one might want to add room and accommodations for Multi-generational homes. Many children are staying at home longer due to debt or divorces and many parents are moving in with adult children.
- Here are some general examples of average returns on your investment for completing these valued projects, as provided in Remodeling Magazine’s 2017 Cost vs Value Report.
Project Long- Term ROI
Entry door replacement (steel) 91%
Siding replacement 76.4%
Minor kitchen remodel (midrange) 80.2%
Garage door replacement (midrange) 76.9%
Two-story addition 71.1%
Family room addition 69.3%
Roofing replacement 68.8%
Bathroom remodel 64.8%
Other improvements that make a difference, especially in older homes, are upgrades to the home’s, wiring, plumbing and heating/cooling systems. A 2014 networx article indicates that people are attracted by eco-friendly home features and are willing to pay for them.
Keep in mind that not all home improvements add a great deal of value however, if you are planning to live in your home for many years, there is intrinsic value in making your home your own. Keep the length of time you plan on staying in your home in mind. If this is your retirement home and you plan to live there for 15 to 30 years, you should do what makes you happy. If you are planning to sell within the next 5 to 7 years, your home improvements should be made with resell in mind.
I have helped hundreds of families with home improvement loans and renovation mortgages. If you would like to talk about your home improvement project will free to give me a call at 214-945-1066. If you would like to learn more about home improvement loans visit this page for more details or apply online now for a home improvement loan quote.
Richard Woodward, NMLS 217454
Your Local, Direct, 5 Star Rated Mortgage Lender, Specialty Lending Manager
Office: (214) 945-1066
Service First Mortgage NMLS 166487
6800 Weiskopf Ave #200, McKinney, TX 75070
Licensed by the Texas Department of Savings and Mortgage Lending (SML) Mortgage Banker Registration. Service First Mortgage is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer and property qualification. Rates and fees are subject to change without notice. The views expressed on this site are those of the individual author and do not necessarily reflect the positions, strategies or opinions of Service First Mortgage or its affiliates.