Homeowners, especially during slow or soft markets, should take care not to make improvements on their properties, without ensuring the return on their investment when ready to sell.
From this perspective, it is worth for a homeowner to take a closer look at remodeling investments, and how much of a return you can really expect to get on them.
There are certain rules, which should be considered before entering into a remodeling contract. The homeowner must remember that there are certain features preferred by buyers, whereas others, such as pools, may not be desirable by all buyers and even have the potential to act as a deterrent.
Most experts agree that the following rules are true nationwide, although they may slightly differ from state to state:
- midrange bathroom remodeling: 102.2%
- replacing exterior siding: 103.6%
- large kitchen project: 85% to 100%
- moderate kitchen project: 98.5% to 100%
- “luxury” items such as wine cellars or media rooms may not be equally desired by all prospective buyers.
- pools might be desirable to some families but also have the potential to be considered liabilities, therefore, pools are not likely to result in a profitable investment.
The potential return on your investment often depends on the regional market, the neighborhood and the characteristics of the individual home.