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Which
home improvements give the best payback?
If you’re thinking about remodeling your kitchen, or finishing
your basement, you probably want to get your investment back when you sell
your home. But when it comes to payback value of home improvements, some
are definitely more profitable than others. As a general rule, kitchen and
bathroom projects usually get a nice return on investment, typically 90% or
more. Things like adding rooms or finishing basements tend to pay back the
least. Finishing a basement usually returns less than 50%, so it’s not a
project likely to show profit at selling time.
There are a number of factors that go into determining how well a project
will pay back. Payback value depends a lot on the current market conditions
in your area. If the market is hot and homes are selling fast, you can
expect a higher payback value than you would get in a slow market.
The type of project you do and how it fits in with other homes
in the area can have a big influence on payback too. If you put your money
into the wrong type of improvement, you won’t get your money back. But if
you're smart about what you do, you can make money. The payback will be
better on improvements that are in demand and conform to neighborhood
standards. Adding a second bathroom in a neighborhood where most homes have
two bathrooms will give a high return on investment. Building a large
addition that makes your home twice as big as the other homes on the block
probably won’t pay back very well. Likewise, the popularity of a project
will factor into how much it pays back. An improvement heavily customized
to your wants and needs won’t pay back as well as something more common to
other homes in the neighborhood.
Another factor to consider is the cost of the improvements. If
you can do the work yourself, you can save significantly on the cost of the
project and greatly improve the chances of getting a good return on the
investment.
The list below is compiled from several published surveys and
shows typical payback for some popular remodeling projects:
- Kitchen
remodeling – 90%
- Add a
bathroom – 90%
- Bathroom
remodeling – 80%
- Install
central heating – 90%
- Install
central air – 75%
- Add a deck –
70%
- Replace
windows – 70%
- Add a room –
55%
- Build a pool
– 45%
- Finish a
basement – 40%
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Know your options when selling your home!
You need someone who will know the best way to market the improvements
you have made to your home, for that and much more, contact me at
www.GeniyaK.com
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