As a homeowner, there are projects you need to get done and those that you can't wait to get started on. So, how do you choose which ones are actually a wise investment?
Is your home improvement project a good investment?
You’ve heard it said that your home is the single-biggest investment you'll ever make.
Even in a struggling economy, that statement still rings true. But as most homeowners will tell you, buying a home is just the beginning of a long, love/hate relationship called “keeping up the place.” Chances are, you've got a growing list of home improvement projects you'd like to tackle. The trick is to know which of those plans are good investments, and which should be left off the list entirely.
Enjoy Now, Recoup Later
Truth be told, there are some home improvements that actually do pay you back — in tax savings, through energy efficiency or, best of all, by a higher appraised value when you go to sell your home. Some of these “smart” investments are predictable, others may come as a surprise ... but all are viable improvements worthy of consideration. Take note, we’ve highlighted some of the typical mid-range projects, based on national averages, from Remodeling Magazine’s Cost vs. Value Report 2010-2011*.
Consider a Sustainable Approach
You may wonder if it’s possible to remodel and decrease your carbon footprint? Yes — more and more products are being created by forward-thinking companies with sustainability in mind. Consider vinyl siding: Not only does it insulate far better than wood (energy savings) and without required upkeep such as painting (no VOC emissions), some vinyl siding products are comprised of abundant natural resources (smaller manufacturing footprint), require less packaging (create less construction site waste for the landfill), and include recycled content. Look for a manufacturer that reuses and recycles, including all post-product scrap material, pallets and packaging material, reducing raw material needs and landfill use.
When choosing materials like windows, doors and siding, check for the NAHB Research Center Green Approved mark, indicating a product’s eligibility toward National Green Building Certification. While you may not be seeking LEED certification status, it’s good to know your home improvement project is environmentally friendly.
Plan for Payback
Embarking on a home improvement project usually hinges on two factors: schedule and budget. Here are some tips on how to give yourself the best advantage.
Putting your home on the market soon?
Consider projects that are “musts” or add curb appeal — and don’t scrimp on the details. If you’re replacing the entry door (a steel one offers a 102% payback) or garage door (an 83.9% payback), remember to check your soffits and trim. If they show signs of wood rot or don’t match the new door, now is the time to replace them with a maintenance-free option.
Staying put for three to five years?
Think big. The longer you stay in your home after investing in a significant improvement, the more likely you are to recoup the cost, according to CNN/Money**. If your home’s exterior is suffering, think vinyl siding. Not only will you save on maintenance, there will also be energy saving benefits now; plus, new vinyl siding increases your home’s value when you decide to sell (an estimated 72.4% payback later). At the same time you’re updating the look and efficiency of your home with vinyl siding, it’s a good time to consider replacement windows, and don’t forget the trim (a 71.6% payback for sustainable vinyl).
Did you do your homework?
Be sure to research to find out if you’re eligible for government incentives on home improvements that utilize environmentally friendly or energy-saving products. Also, take time to consult with multiple contractors; now, while the market is tight, so many are willing to offer special deals or arrangements. Furthermore, you can similarly shop for home improvement or home equity loans in order to compare rates. A little research will likely keep you from leaving money lying on the table.
Improve with confidence
Now that you know which improvements are wise investments - making the most sense for your home and budget - it’s time for the adventure to begin. Comb through magazines, watch your favorite design shows and search online to get ideas. Take the time to research energy-saving products and environmentally friendly manufacturers. Ask friends, neighbors and co-workers for contractor referrals— and interview them like you’d expect to be interviewed for a job. Put the payback principal in motion, and enjoy a beautiful, financially savvy home makeover. It may be one of the wisest investments you’ll ever make.
**source: cnn money (online), February 10, 2010