Your location and current neighborhood should weigh heavily in your decision to remodel. Even in bad real estate markets, the best neighborhoods hold their value better than others.
Does the neighborhood and home still meet my needs?
People and neighborhoods change over time. Some for the worst and some for the better. Think about this long and hard, especially if you have lived in a place for a while. You may have chosen the neighborhood because of its good schools, its wide open spaces or its proximity to the city and all that it offers. Now, the kids are gone and you hate that 2 hour commute everyday or the traffic. See our article on choosing a neighborhood to help you answer this question.
Lets move on to your home. If you’ve always wanted a nice family room instead of that 10x 11 foot excuse for one, then remodeling may be an option.
Also your pink and blue bathrooms are 20 years old. Sure, you might consider remodeling them, but before you do, consider your existing space first.
I've found that most homeowners are too fixated on room labels. Here is the TV room, here is the bedroom, here is the den, etc. Folks, they can be called anything you want. Try to be flexible and you may be able to save yourself a lot of money.
Lets say you envision a 20 x 15 family room addition that will meet your needs. Next to your kitchen, you have an existing 14 x 13 living room which is used infrequently. It's really more like a parlor or a museum. Strongly consider making use of that "living room" as your new family room and save yourself the remodeling costs. Moral of the story, consider the existing space and how it's used.
Many home owners agonize over balancing their need for a good neighborhood with a super house. Personally, I lean towards the neighborhood, especially if getting the larger home requires a longer commute and being farther away from family and friends.
How long will I stay in the home?
Defining how long you’ll be living in your home will really help define how much you want to do and spend. Irrespective of the cost of the project, we believe that a major consideration is whether you’re going to get to enjoy the fruits of your labor. This is something that is overlooked by many people.
On average, people spend about 5-6 years in a home before moving on. This is just a national trend. In addition, we’re all living longer these days and many of us may be caring for our parents in their later years. This fact alone may preclude moving to another neighborhood altogether or moving too far away. It also has a bearing on how you renovate. Many empty nester are moving closer in. They want to downsize and be in walking distance to restaurants and shops. The high price of gasoline is also making people think twice about that big home in the burbs. Of course good rail service could make a big difference.
Perhaps your life partner or parents may not be able to cope with the noise of the city or going up and down stairs. They may long for the country side or just need their own space on the main floor. If this is your situation and your living in a colonial style home, you may want to convert a room on the main floor into a bedroom and create a full bath with shower.
If you’re in the military or in a position where your job requires you to move every three years, sinking a lot of money into a remodeling project may not make much sense either. However, one can also make a case that irrespective of how long you’re going to stay, meeting your needs is an overriding priority.
What are remodeling project returns the most value?
Right now, minor kitchen remodeling, an additional bathroom, and bathroom remodeling projects return the most value. Irrespective of the 2006 cost value report, I approach remodeling differently and so should you.
The best ways to approach a remodeling project is to ask whether a home buyer would appreciate what you have done and pay full price for it. Think long and hard on this, especially since the housing market is not good. You may be shocked, especially if you spent money for expensive bathroom fixtures, marble tile, the latest Jacuzzi tub, steam shower. Using the Middle Atlantic cost and value figures, shows that most buyers will not pay as shown below.
Regular Remodeling Projects (Prices may be inflated)
Bathroom Addition costs $25,867, but buyers will pay $21,084 or 81% Bathroom Remodel costs $11,778, but buyers will pay $10,226 or 87%
Major Kitchen Remodel costs $50,860, but buyers will pay $43,653 or 86%
Upscale Remodeling Projects (Prices may be really inflated)
Bathroom Addition costs $55,878, but buyer will pay $43,005 or 77% Bathroom Remodel costs $35,212, but buyer will pay $28,054 or 80%
Major Kitchen Remodel costs $103,529, but buyer will pay $85,634 or 83%
To get a better sense of what buyers in your area are like, call a Realtor that specializes in our neighborhood. Ask them what their buyers are looking for and what they think about the cost and value report. In the Washington DC area, it's updated bathrooms, hardwood floors, an updated kitchen with Stainless Steel appliances and granite counter tops. Yes in some homes, buyers want top of the line appliances and expect it for what sellers are asking.
This doesn't mean that you have to buy cheap when you remodel. Go with Kohler bathroom faucets instead of Hansgrohe or Grohe. Substitute the Bianco kitchen sink for the more expensive Franke model. No one is going to notice. Or install the bathroom ceramic tile trim that is $4.75 per foot instead of $19.95 per foot.