Some people are remodeling in preparation for selling their homes while others are remodeling to make the home more livable for them self and their family. But make no mistake, remodeling is one of the hottest activities in the real estate industry right now.
This is a real estate story that doesn't change much. Bathrooms continue to be the number one remodeling project followed closely by kitchens. A National Association of Home Builders survey found that in 2015, 81 percent of home builders remolded bathrooms and 79 percent worked on kitchens. However, some of these projects are getting even bigger with 49 percent stating they remolded entire homes and 47 percent building additions onto homes.
The reasons for these remodels are diverse. Some homeowners want to upgrade to the 21st century with new kitchen cabinets and granite counter tops. Others just found the bathroom tile to be ugly and wanted it changed. Others didn't want the expense and hassle of moving to a larger home so they added a room or finished the basement.
Remodeling projects increase when home prices go up. Today, people are more confident about the economy and their personal finances. To finance remodels, homeowners are dipping into home equity, maxing out credit cards, or even taking money out of retirement accounts.
Homeowners should carefully consider their reasons for remodeling before dropping tens of thousands of dollars stylizing the home to their personal taste. Remodeling to recreate your childhood home is not going to bring you more money if your plan is selling your home. It could actually do the opposite. The vast majority of buyers want a turnkey modern home.
Your best move is doing the remodel for yourself. Think out into the future. If you think you will be moving in the next couple of years, remodeling today makes more sense than remodeling a couple of months before listing it for sale. The best use of your money is to enjoy the remodel yourself for a few years. When it comes time to sell, you'll only need to spruce it up a little to get the maximum value for a relatively newly remodeled home.
You don't need to spend your last dime to get a decent return for your buck. Multiple studies have consistently found the best returns for your investment are:
These are the types of improvements that will save you money over the next several years and still enable you to maximize your sales price when the time comes.
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Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.