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  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 mowing lawns.

  • 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 TypeReturn on investment
Interior Decorating 100%
Central Air Conditioning90%
Deck (10' X 12')80%
2-Car Garage80%
Kitchen & Bath Updates70%
3-Season Porch65%
Finished Basement60%
Main Floor Added Room55%
New Furnace55%
Permanent Storage Shed50%
New Roof50%
Electric Upgrade (100 to 200 amp)40%
In-ground Pool25%
Hot Tub10%

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)

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