09 Sep You Have $15K for Renovations – How to spend for maximum value for your buck?
HGTV effect pushes home renovation spending to record high. Home owners often take a less strategic approach to remodeling their homes prior to putting them on the market. Cash spent on renovating all sorts of lovely options—from a marble island-top for your kitchen to a hot tub in patio might not get paid back as expected, when they sell.
Basic concept of renovation is to only spaces that are functionally obsolete. Changing out something you do not like might not be a good investment. Investors should carefully choose their remodeling efforts focusing on those that will result in the most value for the least amount of cost. Part of the process includes paying attention to the other homes in the neighborhood to avoid over-improving the property.
With a limited budget in hand, you first need to make sure your house has a roof that doesn’t leak, functional gutters and downspouts, dry basement, good furnace, solid floors and all of the other common-sense items that buyers expect to find in a home. Money spent on these items is unlikely to be fully recovered, but should at least result in ensuring that your house sells for a price that is comparable to other homes in the area or preventing water damage today it could, and most probably will at some point, save you thousands.
Once your home is secure of these major issues, you can target your spending to there sections like kitchen, bathrooms, flooring, painting or basement.
How much should you invest? John Bredemeyer, spokesman for the Appraisal Institute suggest to spend no more on each room than the value of that room as a percentage of your overall house value.
Kitchen: 10% to 15% of house’s value
Master Bathroom Suite: 10% of house’s value
Powder Room/Bathroom: 5% of house’s value
Finished Basement: 10% to 15% of house’s value
Other Rooms: 1% to 3% of house’s value
Patio, Deck, Paths, and Plantings: 2% to 5% of house’s value
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