Home Improvement Project ROI
While it's fun and easy to plan your home improvements, you should be aware that not all projects will have the same effect on your home's worth. Therefore, you must also plan well. This article will provide a guideline on getting the best bang for your buck and details about how to pay for home improvement projects.
The Most Common Home Improvement Projects
Remodeling Magazine annually compares the national average cost of popular remodeling projects to the value that these projects retain when they sell. This value vs. cost analysis reveals similar trends each year about which projects provide the highest return on investment (ROI).
Because of their high functionality and curb appeal, replacing your garage or front door is a relatively inexpensive project that can return 85-100% ROI.
Wood deck additions and siding replacements are more costly projects that deliver a 70-80 percent return on investment.
A minor kitchen remodeling project will yield 70-80 percent ROI, while a major remodel will bring about 65 percent ROI.
Window replacement can bring you a 68-78% ROI.
A roof replacement can bring you a 60-70 percent return on investment.
Bathroom remodel will deliver 60-70 percent ROI.
These are only a few examples, and they use national averages of mid-range homes. These numbers can vary depending on where you live, what city you are in, and whether you're looking for mid-range or upscale homes.
These figures show that few home improvements can be recouped as a single item. You can ask your agent to explain how your home's improvements might affect the value of your home.
How Do I Price The Project And Find Service Providers?
You can plan your home improvements by category and price each part of the job, including labor, on a line-item basis.
You can also search for a home-improvement pro to bid on the job.
What Will I Pay For It?
The most popular ways to finance home improvement are:
Cash withdrawals from savings can be used to pay cash.
A Home Equity Line of Credit is a second mortgage that you can place on your home
You can use it as a credit card, and you can draw from it (using your checkbook or credit card) whenever you need it
A HELOC can be placed and left at a zero balance until it is needed. You'll only have one monthly payment if it is used. Learn more about how to obtain and use a HELOC from a HELOC lender.
You can cash out your first mortgage. You might get a higher rate because cash-out refinances are more expensive than traditional or purchase loans. Your profile will help your lender inform you about your options.
Gift from a family member
Gift tax is levied on the recipient, not the donor. However, most gifts can be tax-free.
Credit card
This option is the most expensive.
