Where to Invest When it Comes to Home Renovation Projects

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Ideally every home renovation project you choose to undergo will satisfy a number of different requests at the culmination. Specifically, you should enjoy a 1) improved quality of living while hopefully 2) improving your energy efficiency, and 3) making your home more valuable.

One of the hardest things for (some) homeowners to come to grips with is putting money into renovations now while also keeping an eye on the home’s market value for down the road. Is a finished man cave or a patio hot tub going to improve your quality of living now? Definitely. Is it going to impress buyers in 10 years? Not necessarily – but maybe. Therein lies the fun in home renovating.

It’s your money and it’s your house so you should always invest where you see fit. For those that may be indecisive however, here are some project types with typically the best ROI.

Where You Can Make Your Money Back Monthly

Many of your home renovation projects aren’t going to show any ROI until you list on the market. Of course this doesn’t mean you can’t enjoy them in the meantime. That being said, there are also projects that can pay you back monthly by improving your energy efficiency. An insulation upgrade, for example, might not be a ‘sexy’ project but it will lower your heating and cooling bills – giving you essentially free money for those ‘wow’ renovations.

The Kitchen or Master Bedroom

The two most important rooms in your home are your kitchen and master bedroom. When you chose to invest in these areas of your house, you’re greatly improving your market value. Flooring is always a great option but knocking out walls to expand these spaces might be your best use of budget.

Where You Can Expand Your Outdoor Living Space

Taking a ‘dead’ outdoor areas and turning them into something functional is another great use of your budget. A plush lawn for example offers nice curb appeal, but a patio, deck, outdoor kitchen, pergola, etc. offers much more value to your property comparatively. These projects expand your home’s living space often times without an increase in property taxes like a home addition would do. These outdoor areas don’t require electricity or HVAC (and actually save you from using it when being indoors) so they provide value in multiple ways – including patio parties.

Where You Can Turn Storage Into Function

Taking an attic and turning into a bedroom or a home office is a great example of ‘creating’ function. Remodeling an unfinished basement into a rec area is another prime project that expands your living quarters without increasing your home’s square footage.

When you focus on renovation in these areas, you’ll not only be satisfied with the project now, you’ll be extra happy when you decide to refinance or put your home on the market. There’s really no reason that with maintenance and upkeep your home can’t go up in value every year – but with a renovation that market presence can improve drastically.

Avoiding Bad Renovation Advice

As a homeowner one of the pieces of advice you’ve almost undoubtedly always heard was, ‘it’s always good to invest back in your property.’ That’s true, but at the same time you also need to invest wisely. Replacing 5-year old windows for units that are barely an upgrade, for example is just a waste of resources.

If you’re in the market for putting some money back into your house, avoiding bad renovation advice is just as important as seeking out good advice. If you have friends, neighbors, or other contractors suggest these types of projects, run away fast and take your checkbook:

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Tearing Down Walls is Easy Demo

It can be a kind of cathartic experience to take a sledgehammer to an old wall and converting your home to an open floor plan is one of the best renovations you can make. It might sound like removing a wall is easy DIY prep work that can be done before the construction crews arrive. The truth is though, sometimes these walls are important features. Specifically, if a wall is load bearing you might cause your entire roof to collapse. Beyond that there are electrical and plumbing components that may be running through the studs in the wall. Sometimes it’s better to leave even demolition work to the experts just to be safe.

Homes Need to Be Updated

You might get the opinion that your home is outdated. However what is deemed ‘old and tacky’ could actually be ‘historic.’ You might think that putting money into your old home is an investment that will recoup you money in the long run when actually you might be removing key features (wood especially) that might actually have more value. This doesn’t mean that older homes can’t be renovated and worked on of course, but not all projects are equal.

You Get What You Pay For

A homeowner has a constant struggle with wanting to install quality materials but at the same time keeping their costs low. The common notion that ‘you get what you pay for’ isn’t always true however. You can find some great value on materials and most of the time it’s the quality of work that will determine your return on investment – how you do it instead of just what you do.

Know What You Want

Finally, the best way to avoid bad renovation advice is to know what you want – preferably during the design process. Having a plan is the best way to make sure the plan is accomplished.

9 times out of 10, or better yet 49 times out of 50, your project is probably going to go off without a hitch and you’ll be completely enamored with it. When you start walking that fine line however is when your renovation becomes a financial drain. Remember, it’s not only the up-front costs you’ll be out, your home will have a lower market value. Homes aren’t like cars because they appreciate in value – as long as you’re responsible about it.