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Are You Over-Improving Your Home?
In the next 5 years we probably will not see the real estate appreciation we have seen in the past 5 years. We might want to think more about the improvements we make to our homes. When you improve your home you can be paid back in two ways - economically (when you sell) and by personal enjoyment. Rarely will you see 100% economic returns on your remodeling investment, so select projects carefully, especially when appreciation will not quickly catch up with your costs.
If personal enjoyment is sufficient payback, go ahead, but realize you won't get all your money back, in some cases you'll even lose. Everyone doesn't want a swimming pool!
Below are some relatively low cost projects that will make you money when you sell.
Repair plumbing and electrical systems: Cost - $400; increase - $1,000.
Improve landscaping and trim (no flamingos): Cost - $500; increase - $1,600.
Paint interior (neutral color) Cost - $1,600; increase - $2,400.
Paint exterior (neighborhood compatible): Cost - $2,300; increase - $3,000.
Replace carpeting (neutral): Cost - $2,700; increase - $3,600.
Remodeling Magazine annually publishes a cost vs. value survey of home improvements (http://www.remodeling.hw.net). Select "Special Features," then "Cost vs. Value."
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