Why a home remodel may be better than a savings account
(ARA) – Are you keeping your home longer than you expected, due to the sluggish and uncertain home-resale market? If you are, you’ve got company. Only 43 percent of homeowners believe they would get their asking price if they sold today, according to the latest American Express Spending & Saving Tracker.
That lack of confidence, coupled with interest rates on personal savings accounts that are at or near record lows, has a lot of homeowners investing in their homes instead of depositing money in their banks.
In fact, nearly two-thirds of homeowners will be remodeling in 2011, says American Express. Improving your home can be a smart strategy over the long run. In the meantime, it can make your home more comfortable and convenient while you’re living there.
Now is the time to ask yourself if putting your hard-earned savings into your house is right for you. You won’t see the return on your investment in the near-term, but when you factor in a quicker sale or higher sale price, you could end up with more profit than savings account interest rates can provide.
Improvements that pay
Experts recommend that you stick to improvements likely to increase your home’s resale appeal and value. There’s no such thing as a guaranteed return on investment, but some home improvements have a better value track record than others. A basement remodel will recoup 70 percent of its cost at resale, according to the 2010-2011 Remodeling Magazine Cost vs. Value Report. Adding a bathroom returns more than 53 percent of your investment, while modernizing a kitchen can bring back 72.8 percent.
* Build a bath: If you plan to install a bathroom, laundry or wet bar in an area that lacks below-floor plumbing drainage, you can dramatically reduce your installation costs with macerating technology. Installing drainage in a basement, attic or garage can be messy, time-consuming and expensive. But with macerating, or up-flush, technology, you can have plumbing virtually anywhere in your home, without breaking through floors or jackhammering concrete.
Unlike conventional gravity plumbing, up-flush systems pump waste and water from toilets, showers, sinks, wet bars and washing machines upward. Small-diameter piping carries the waste into the sewer or septic tank. For more information on this cost-effective plumbing option, visit www.saniflo.com.
Want to make your new bath seem larger? Let the light in! If a skylight isn’t in the budget, use recessed ceiling lights and large mirrors. Also, choose a warm semi-gloss paint and install 12-inch by 12-inch or larger floor tiles to minimize grout lines.
A walk-in shower is a smart and cost-effective space-saver. If you don’t need storage space, a pedestal sink is another good alternative. Two surefire ways to give the illusion of space are a recessed medicine cabinet and a pocket door instead of a traditional hinged door.
* Rebuild a kitchen: An average rebuild of a kitchen takes nine months to plan and three months to build, according to the National Kitchen and Bath Association. You can improve the overall look and feel of a kitchen with a lot less work and money simply by refurbishing what you have. Some refurbishing options include refaced cabinets instead of new, resurfaced countertops or an added backsplash, updated flooring and under-cabinet task lighting.
Regardless of the project you plan to undertake, there are a few things you can do to ensure you get the most for your money. Here are some general tips from the National Association of the Remodeling Industry (NARI):
* Establish a budget:
* Hire a qualified remodeler who is familiar with local building codes.
* Compare products and prices before you begin.
* Work with a contract.