Remodeling your house
can be very expensive. Before you invest your hard
earned money on remodeling your house, you would like
to know what the returns on this investment would be.
One would like to know whether the resale value of the
house would increase once remodeling is done. You
would like to know whether it is better to build a new
house or to remodel the existing one. Returns on
remodeling investment depend on a number of factors.
These factors are briefly discussed below.
The type of remodeling you are planning to do
is important. If you plan to repaint your house then the
investment will not be large. But if your plan to make an
extension in the existing structure, then it will involve a
big investment. Depending on the geographical location of the
house such an investment will be positive or negative.
Returns will depend on the market value for
houses in your locality. If the prices of house are increasing
in your locality, then you will get a good return. But it
prices are decreasing then remodeling will not add value to
your house.
Returns will depend on how your house will
appear after the remodeling is done. If it doesn't fit in with
the way the other houses look in the neighborhood then the
value of the house will not increase.
Returns will depend on number factors in the
neighborhood as well. If a highway is being constructed in the
neighborhood the value of the house is likely to decrease in
future.
Returns will depend on the time taken to
commute to one's work place. If your neighborhood has easy
access to work places and highways then the value of your
house is likely to increase.
If local transport facilities are good then
the returns on remodeling may be high.
Returns on remodeling investment will depend
on the quality of elementary schools and the over all quality
of public education system. If the quality of education is
good then the returns will be high.
Returns will depend on easy access to shops,
grocery stores, restaurants and shopping centers in the
neighborhood. If your house has easy access to most of the
above then the value of your house is likely to increase with
remodeling.
If the taxes are high in your municipality
then the value of houses will decrease.
If the crime rate is high in your
neighborhood then the returns on remodeling will be less. As
your locality will be less attractive to new tenants.
When one is investing a lot of money in
remodeling, he does so hoping that the resale value of the house
will increase. Depending on the above factors decide whether
investing in remodeling your will be a positive or negative
investment. By remodeling your house if you intend to increase
its resale value, then use the above factors as a checklist and
then decide whether remodeling your house will be worth it or
not.
