One of the great joys of being a homeowner is the challenge of improving your property over time, and your property’s market value along with it. There are endless ways to do this, and no shortage of popular entertainment (TV shows, magazines, social media accounts) dedicated to home improvement.
Aside from the pleasure of making small, incremental improvements to your property, without relying on professionals, there’s also the question of those larger and more important renovations that most homeowners wouldn’t want to attempt on their own. This could be anything from a bathroom renovation to an attic conversation. These are projects that require a very high level of expertise, the right tools, and years of experience in order to execute perfectly in a reasonable amount of time.
There are basically two reasons why homeowners give the green light to home renovation professionals and invest their hard earned cash in these projects: First, there are real lifestyle changes available through many types of home renovations. Kitchens, bathrooms, open floor plans, or basement/attic conversions are the best examples. When these projects are completed to a high professional standard, the day-to-day experience of living in your home will change for the better.
The second reason, of course, is equity and market value. By making smart home renovation investments, homeowners plant the seeds for a more valuable property, and a more desirable one as well. It’s not always the case that market value increases as much as the cost of a major renovation – but a good percentage of that money is almost always recovered immediately in terms of market value, depending on the type and quality of renovation you’ve undertaken.
So let’s get back to our original questions – are home renovations a good investment? The answer depends on a few key factors, such as:
1. Does the renovation make your home more valuable in terms of the average home in your neighborhood?
For example, if you eliminate a bedroom by opening up your floor plan, and your home has fewer-than-average bedrooms as a result, your investment might not pay off in terms of market value.
2. Did you neglect more important repair or maintenance issues in order to pay for this renovation?
For example: If your home needs new siding or roofing, and you opt for a glamorous kitchen makeover instead, the strategy could backfire financially.
3. Did you hire a reputable and experience contractor with written guarantees in the contract?
For example: If you’ve hired a highly reputable home renovator, and mistakes are made, you won’t have to wonder if they’re going to be fixed – it’s already built into the contract.
How to make a smarter investment in your home
Your renovation may look like a good idea on paper, but if the execution isn’t there, isn’t not going to be as valuable an investment as it should have been. In fact, in the worst cases, shoddy home renovation work can actually decrease the value of your home. Avoid this type of scenario by paying close attention to the reputation and experience level of each contractor you hire, and make an organized decision as to who you should trust with your home renovation investment. Good luck!