Homeowners should consider these renovation tipsDate posted: 3/11/15 06:15:00 AM
There's no slowing the home remodeling market. According to a report from IBISWorld, a global business intelligence leader specializing in market research, the home renovation market reached a sum total of $52 billion in 2014, a 3.8 percent increase from 2009.
And with winter quickly approaching, many homeowners are trying to squeeze in their last remodeling projects before the weather leaves their home out in the cold. Here are a few renovation tips to consider.
Fill out the proper paperwork
According to Rick Goldstein, an architect in Atlanta, every type of remodeling project requires some sort of building permit.
"Typically, city inspectors will inspect the work of each trade at both rough-in and finish stages of the project, [checking] that the work was installed safely," Goldstein told U.S. News.
He said it's important to be wary of any contractor who claims inspections and permits aren't obligatory, stating that it could cost a homeowner steep fines. It also might make the project more expensive and make the finish time longer to complete because inspectors might reopen walls and ceilings.
Come up with a realistic budget
No homeowner wants to be faced with a home renovation project that is well above their budget. When that happens, a homeowner is typically left with a half-finished project, making the property look worse than before the construction commenced. Goldstein said this makes it crucial to set a realistic budget. He also added it is important for homeowners to have some extra funds set aside in case of any surprises.
"Remodeling always costs more than expected," Goldstein said. "Costs will vary significantly based on the size, complexity and quality of a particular project."
Goldstein urges homeowners to keep an extra 10 percent of the upfront cost in reserve in case any problems happen to come along. Homeowners should expect to dole out $200 to $300 per square foot for a top-notch master bedroom or kitchen remodel.
"Understand that there will be trade-offs, and you may even consider phasing the project to meet your budget needs," he said.
Consider your property an investment
While home renovations should cater to your wants and needs, they should also provide solid value when you put your home on the market.
That's why it's important to consider renovations that offer solid return on investment. Sal Alfano, editorial director of Remodeling Magazine, told MSN Real Estate that remodeling projects aren't offering the same return on investment that they did several years ago.
He said home sellers earned back more than 86 percent of the money they spent on remodeling projects in 2005, though that number has dropped every year, falling to 57.7 percent in 2012.
However, that doesn't mean you can't earn a solid investment through certain projects. For example, replacing exterior features can help improve curb appeal and provide solid returns.
"Replacement projects are really strong because they're cheap and they make the house look good immediately," Alfano said. "If you get new windows, new siding and replace the front door, the house looks great. It sells faster and for more money."
Avoid making your home the best in the neighborhood
One way to ensure your home won't see a major return on its renovation investment is by over-improving your property. If most homes in your neighborhood are 2,000 square feet, it's rarely a good idea to make a 1,000 square-foot addition, making your home the biggest on the block.
Mark Attarha, broker and owner of East Bay Sotheby's International Realty, told U.S. News that a home's value is often consistent with the median value of other homes in the neighborhood.
"Look at the neighborhood's median home price levels," Attarha said. "The statistic will provide you a good idea of what similar homes are selling for and help you determine how much money should be invested to help ensure positive return on investment."
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