How Much Should a Home Remodel Cost?

On March 18, 2016 by Josh

Remodeling certain areas of your dwelling can boosts its functionality. It can also increase your home’s value. It can also be easy for homeowners to go above their budget on a renovation. There’s no guarantee that you’ll be able to recoup the money when you’re ready to sell. The following are considerations to help in your decision making.

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Neighborhood Home Value

Dressing up your home’s windows with curtains may be visually pleasing, but it won’t boost your home’s value. When you’re ready to renovate, you want to think about the other homes in your neighborhood. Prospective buyers will pay more money for a home that is move-in ready. They also won’t want to pay over fair market value. Your home improvement project should never exceed the other homes in the neighborhood. Concentrate on two or three problematic rooms in your home. The funds that you spend on the renovation with guarantee a bigger profit when you sell.

Determine the Cost of the Work

Financial planners will frown on a homeowner who buys a home and borrows money to fund the repairs. An FHA 203k loan allows you to borrow funds based on the home’s future value. If you’re amortizing the repairs into your housing investment, you will have instant equity. Long lasting repairs that are simple are also going to yield the biggest gains when your home sells. The most financially rewarding rooms are often the kitchen and bathroom remodeling projects. Renovated cabinets, counters and cooking areas are sure to generate a higher priced home than the other comparable dwellings. Before you tackle any project, you want to get several estimates. They should also be from reputable contractors. To cover any changes, you want to add 10 percent to that price. This can give you the most accurate estimate price for your remodeling project.

Amount of Time You Plan on Staying

If you plan on staying in your dwelling a considerable amount of time, it may pay to invest a larger sum of money. Over time, your home is sure to go up with the improvements that you make. You’ll also have the added benefit of being in a home that you enjoy and meets your specific needs. If you’re only in it for the short term, a major renovation doesn’t make sense.

Home Inspection

Depending on the area you live, you may want to start with a termite inspection. Hiring a home inspector at the start can point out defective areas of your dwelling. It’s best to get an opinion from a certified and licensed professional. This will alleviate surprises before you begin work on your home renovation project. If you’ve purchased your home in recent months, you’ve probably had an inspection prior to its sale. Refer to your home inspection documentation before any additional money is spent.

Discuss Your Improvements with a Real Estate Agent

Your real estate agent may be handy when you’re looking to renovate. To get an accurate market value of your home, they’ll be able to provide you with a comparative analysis. Discuss with them the improvements that you’re thinking about making, and the costs. They’re professional opinion can help determine if you’ll be able to recoup the costs when you’re ready to sell.

Stick to Your Budget

Undergoing a major home renovation may be exciting. It can also be costly if you don’t adhere to your budget. Certain upgrades may make your life easier, but it could be costly if you can’t recoup later on. Stick to the remodeling projects that are in your budget. Any money leftover can be dealt with after you’ve finished.

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