Improvements Can Increase A Home's Value
Many home improvements will improve both your quality of life and
your home's value, but some won't increase your home's value at
all. Here are some worthwhile ideas:|
- Do an improvement that's popular and attractive.
People like nice carpets, paint and wallpaper, kitchens,
bathrooms and decks. Avoid improvements that "stick out
like a sore thumb," or that most people won't use. A
swimming pool or hot tub is a detraction to some people, and may
not increase home value at all.
- Don't over-improve. If you build
up the value of your home more than 20% higher than your
neighborhood's average home value, most people will prefer less
expensive homes in the same neighborhood.
- Grow a home improvement: just
planting some trees and flowers will increase your home's
value by thousands of dollars. Take into account
maintenance costs: you may want to use a lot of rocks and trees
and bushes, if you want to save time and don't like gardening and
- Consider property taxes: they may rise if you
improve your home, especially if they're exterior improvements,
which your tax assessor can easily see. If property taxes
are high in your locale, you may wish to delay making
improvements until a year before you sell your home.
- For tax purposes, save all records of
home-improvement purchases and the time you spend laboring on
your improvement. When it comes time to sell your home, you
can reduce your capital-gains taxes by adding these expenses to
the price at which you purchased your home.
Here's a list of possible home improvements, and estimates of the
normal Return On Investment ("ROI") if you contract it to someone
else. These estimates are not from any one source; they are
averages of various articles we've seen on the Web and in books
about home improvements.
|Improvement Type||Return on investment|
|Interior Decorating ||100%|
|Central Air Conditioning||90%|
|Deck (10' X 12')||80%|
|Kitchen & Bath Updates||70%|
|Main Floor Added Room||55%|
|Permanent Storage Shed||50%|
|Electric Upgrade (100 to 200 amp)||40%|
The Annual Cost Vs. Value Report talks about the value of
remodeling projects in greater depth.
(Next Gem: How To Comparison-Shop For A Mortgage)