Home > Economy, Real Estate > How to Get the Most Return on Home Improvements

How to Get the Most Return on Home Improvements

As an architects, I meet more and more homeowners who are interested in renovating or adding on to an existing home rather than seeking to sell and move or to build new.

Their questions are plenty, but usually revolve around one central issue:  How to I get the most out of my home improvement dollar?

Here are some general tips to consider when deciding whether or not to undertake your project:

  1. Assess how long you want to remain in the home.  Obviously, if you are thinking of staying put to enjoy the fruits of your improvements for ten years, you will be able to make different decisions than someone interested in moving on from a fixer-upper after only one or two year.  Think of this time as “emotional” or “utilization return” on your investment.  This factor will also affect the life-cycle return of energy efficient improvements such as new windows or insulation.
  2. Refer to the latest numbers.  Check out this Cost vs. Value 2009-2010 resource from Renovation Magazine to see how much of your money you can reasonable expect to recoup when you sell the house.  There is data for various regions and metro areas across the country, so you should be able to get a good idea of a general range for typical improvements such as adding an attic bedroom, or renovating a master bathroom.  The difference between cost and value is the true price tag of your improvement.
  3. Consider doing some of the work yourself.  Labor can make up anywhere from 15% – 30% (or more) of the cost of a renovation job, so tackling some of the simpler items can make an impact on the overall budget.  Beware, however, of taking on more than you can handle safely and economically.  Frustrations, complications, and delays are always just below the surface on renovation projects.
  4. Remain sober about the economic benefit of certain changes.  If you check the Cost vs. Value chart from number two above, you realize gone are the days of renovating a bathroom or kitchen and selling your house for a 20% gain in just over a year.  Is that “true price tag”worth spending to get your emotional or utilization return?
  5. Ask for professional advice before undertaking a big project.  As an architect and real estate agent, I am obviously a big proponent of planning and knowing the realities of your real estate market before making decisions regarding home improvements.  Most professionals will be glad to give an quick opinion or consult without cost or obligation.  If you like what they have to say, consider engaging them to help you with the rest of your project.  Find a professional for your job at ServiceMagic.com.

Overall, being realistic with your goals, expectations, budget, and abilities are all critical aspects to a home improvement.  Assembling a team of professional advisers may cost a little more on the front end, but could save big bucks by steering you clear of costly mistakes.

About Andrew Wilson

As a licensed architect, co-founder of [1016] Architecture in New York and Chicago, and a Licensed Real Estate Salesperson and Realtor with the New York office of RealEstate.com, I bring a unique perspective to the real estate purchase process and see often opportunities where others may not.

I have dedicated my professional life to learning as much as possible about the real estate market and the built environment. I am committed to sharing that knowledge with my clients through exceptional service.

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Categories: Economy, Real Estate
  1. April 19, 2010 at 7:56 am

    Thanks for the tips provided. It is great to be here and knowing lots of information regarding real estate. Also thanks for sharing those link resources here.
    Keep posting more like the same.

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