Remodeling clients often have questions and concerns about the return on their investment for including various features and amenities they might be considering.
I get it. Construction isn’t cheap. If you are going to invest $30,000, $100,000, $250,000 or more in the remodel and / or addition to your home, you want to mitigate your risk.
I’ve written about the return on investment before. Now check out the video.
The thing is, it really depends on your plans for the house. Are you trying to flip it and make some cash in the next year or two? Are you going to rent it out? Or is this the home you plan to spent the next 10, 20, or more years in?
The answers to those questions are key.
But there is also the cold reality that the cost of most renovation features (new windows, new wiring, remodeled bathroom, or kitchen) will only increase the value of your home 40% to 85% of the cost of that feature. If you spend $10,000 on new windows. If they are quality windows the value of your home may only increase by $4,000 to $8500.
But the change in the value of your home is not the only way to get a return on your investment.
For some improvements, like the windows, there may be other savings to be had: for instance, replacing old single paned aluminium framed windows with double pained metal clad wood windows, means that you will see a drop in your heating and cooling costs. If you include the additional monthly savings on your energy costs, over the span of 3 to 5 years, you will recoup the rest of the cost of the window investment.
Some improvements make for an easier and quicker sale of a property. If you are planning on flipping a property or selling it in the next 1 or 2 years, investing in a new, quality front door and a new, quality garage door, and a good exterior paint job, can help sell a house much faster.
But this focus on numbers ignores the reason, you, and most people, are remodeling in the first place: the house doesn’t meet your needs. Living in it is annoying because the flow of spaces is weird, or their isn’t enough storage, or it’s dark, or it doesn’t open up to the back yard.
Correcting these things may not provide a 100% return on the investment in an increase in the value of the home. But they will make living in your home less annoying, less bothersome, easier, and perhaps even joyful. The house itself will cause less stress.
How much is that worth?
How much is a happier spouse and children worth?
How much are the memories of enjoying your home with family and friends worth?
Sometimes investments aren’t about money. They are about quality of life.
Helping you sort through all of these issues is an architect. It is one of the things an architect does.
If you are considering building or remodeling, get your copy of my Project Planning Cheat Sheet to help you prepare by setting a realistic budget and schedule. Just sign up in the form on the right side of this page.
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