The ultimate reason East Tennessee homeowners take on any home remodeling project as an owner-occupant is the enjoyment they get from living in an updated home.
But there can be another benefit—raising the value of the home so you make more money in an eventual sale.
Investopedia says the return on investment—or ROI–of any given renovation project is a function of local market characteristics, the condition of the residential real estate market when the property is sold, and the quality of the work performed. Historically and on average, certain projects, such as the addition of a wood deck, kitchen and bathroom upgrades, and window replacement, have shown the greatest ROI regardless of the property’s location or the state of the residential property market.
However, unless the remodeling project is designed to fix a structural issue or design flaw, it is unlikely that a homeowner will earn back more than the cost of construction. If cost recovery is as important a consideration as increased enjoyment from enhancing the property, then homeowners should consider the tastes of prospective purchasers when deciding which projects to pursue.
When considering any type of project, it is essential to ensure that the improvements made are appropriate for the particular type of dwelling and local property area. One mistake homeowners often make is improving their homes well above the average for neighboring houses. Buyers are attracted to particular neighborhoods because of the services located nearby, and because houses in that area are selling within that buyer’s price range.
Although a house improved well above others nearby may still receive the same level of interest compared to others being marketed, it is unlikely that it will command a premium well above average simply because of the extra improvements.
Time will also have an impact on an improvement’s ability to increase property values. Making structural or design improvements, such as building additions or finishing raw space, will add value for a longer time frame than, say, updates to kitchens and bathrooms or technological improvements, such as new air conditioning systems, because the latter tend to become obsolete over time.
Below is the typical percentage of cost recovery for various types of remodeling projects as compiled by Remodeling Online:
Under the experienced leadership of Matt Garrett, Garrett Construction and Roofing has been serving the East Tennessee area since 2005. We are a licensed General Contractor and our general services range from full residential and commercial construction projects to remodeling, painting, drywall, roofing and gutters. We also help with disaster recovery with experienced teams available to address fire and water damage.
CONTACT GARRETT CONSTRUCTION AND ROOFING TODAY | KNOXVILLE’S HOME RENOVATION EXPERTS