Did you buy a lottery ticket when the Powerball lottery got to $1.5 billion? If you did you decided on one of the worst investments you could ever make with odds of 292 million to one against you. But I bet you got your $2 worth of excitement and dreaming. ????
You can look at home improvements the same way. From a strictly dollars and cents analysis almost all home improvements make no sense. In most cases, you are not going to get the money back you put into them. But is a home improvement going to perk up the quality of your life, make you proud of your house, improve your lot with the neighbors, make your life more fun? You can not put a price tag on those.
But be aware that even that emotional boost will not always make a home improvement worth it. Take a hard look at the real estate market in your neighborhood before undergoing a major house upgrade. If all the houses in your area sell in the $150,000 range and you undergo a major makeover to increase the worth of your home to $225,000 you may have priced yourself out of the resale market. Also be careful of altering your living space if it violates the integrity of the house. A bulky room expansion to a classic bungalow, for instance, will destroy its eye appeal to buyers in the market for period-appropriate houses.
On the other hand, time matters. If you are planning to stay in the house a long time the cost of home improvements will start to look good, both in your pocketbook and your pride of ownership. If you are looking to sell in the near-term it may be better to restrict your efforts to a freshening up, take a realistic price and let the next owner sink money into major improvements. Your best financial play may even be just offering a discount or credit for a major repair.
So knowing that you are likely never going to see the money you put into a home improvement going in, let’s look at what you can expect from some common home improvements…
Home Improvements for Northwest Arkansas
1. Steel entry door. Ah, yes, the portal to your soul. An attractive entryway is never a bad thing. But to return the bang for your buck go with a modern insulated steel door. The energy savings and fresh look will return anywhere from 95% to 120% of its cost, depending on how grungy the front door looked at the beginning of the project.
2. Siding replacement. If your house’s skin is showing its age, new siding is a rational choice. It will bring back between 80% and 90% of its installation cost, more for fiber cement than vinyl among the cheaper options.
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