Home Improvement Payback

There are many factors to consider before you can determine how well an improvement will return on its investment.  Return on your investment will depend a lot on the market condition in your area. If the market is strong and property is selling fast, you may a higher return than you would get in a sluggish market.

 

If you're considering a remodel of your kitchen,  you most likely want to see a return on your investment when it comes time to sell your home.  When it comes to return on investment of home improvements, some projects are more profitable than others. As you can see below Bathroom and Kitchen remodels are some of the highest returns at 90% plus.  Items like swimming pools and extra rooms tend to be on the lowest end of the scale
 

  

 

Over improving for a neighborhood can be costly too.  If you invest time and money into the wrong improvements, you won't see much if any return.  If you take the time and make wise decisions about where you improve, you may see a nice return for your effort. Your return will be better on projects that have strong consumer demand and conform to other homes within the neighborhood. A good example would be bring an older kitchen up to current industry standards or adding a second bathroom to a one bath home.  On the other hand adding a large addition that exceed the average or largest home in the neighborhood will most likely have a dismal return.  Projects that are unusual or individual specific, generally do not have broad public appeal and often have a negative effect on resale value.

 

The following list is a general return on projects and can vary depending on many factor:

 

  • New or remodeled kitchen.................90%
  • New or remodeled bathroom.............80-90%
  • Central heating .................................80-90%
  • Central air conditioning.....................75%
  • Decks...................................................70%
  • New windows....................................70%
  • New rooms........................................45-55%
  • Add a swimming pool.......................40-45%

05/08/2007

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