You love your home, but it is not working so well for you these days. Moving to a new home is way out of your budget, better to modify what you have. But, will you reap the rewards later when you sell it or are you just throwing money down the drain? And, more importantly, if you need to take out a home improvement loan will you reap enough at resale so that you can repay the loan?
What do the experts say?
Housing industry experts agree that home improvement projects tend to do little more than increase personal satisfaction with your home. A 2014 study published in Remodeling Magazine examined the cost of the 35 most popular home improvement projects to see what percentage of the expenses were recouped when they sold the home. The study found that while some projects do increase the value of the home at resale, the majority do not. If you add a component to your home that every other house in the neighborhood already has, then it is worth it to do the project, even if you need a personal loan to cover the costs. For instance, all the homes in the neighborhood have a backyard deck, yours does not, it is worth it to invest in adding a deck. Home improvements that bring your home more in line with what the majority of home buyers need, i.e. two bathrooms is worth the investment.
Home improvement projects that increase the value of your home
According to an article published in US News & World Report in the summer of 2013, there are some home improvement projects that are worth the investment. If you need a home improvement loan, you should focus on these: kitchen upgrades, remodeling and expanding the bathroom, outdoor landscaping, and new roof and windows. The main point to remember is that your home improvement project should be done expertly, but not necessarily luxuriously. Cosmetic improvements to the interior spaces, such as painting, filling in cracks, replacing broken tiles, wood frames, etc., are worth the investment and will make your property much more attractive to buyers. When a potential buyer sees that there is nothing critical to be done after purchase they will be more likely to agree to your asking price, returning to you the funds you invested in the home improvement projects.
How much is it going to cost?
Many elements influence the cost of home improvement, such as the area of the country and how extensive or luxurious the project is. However there are some national averages available. These should be used a ballpark amount to give you an idea of how much you may need to borrow from a home improvement loan. According to home renovation experts, an upgrade of your bathroom is going to cost you between $9,000-14,000. To add a bathroom will be between $8,000-14,000. Kitchen remodels are the most expensive and will cost you minimum $12,000. If you want to enclose your porch to give you an extra room, you can look at spending between $6,500 to 16,000.
Be modest with how much you spend to improve your home. Do not expect a great return on the investment except from those improvement projects that predictably increase the value of your home, resulting in a better sales price.