Investment Opportunity - Remodeling Your Home
Posted in Uncategorized on July 31st, 2009 by admin – Be the first to commentYou might think I’m crazy, but this absolutely the best time to improve your home. Try to follow my logic a bit and I promise that by the end, you’ll see some things perhaps you hadn’t before.
The best means for most of us to earn and save money beyond our salary is the equity in our home. Some investment vehicles like stocks have typicl returns of around 10%, but as we’ve all seen real estate investments can double in an incrediblyly short time. As some folks have painfully experienced, the losses can be as fast also.
These are the only two reasons you should consider remodelling your home:
- You want to better your living condition and the enjoyment of your home.
- You want to develop your home to its Highest and Best Use. By this I mean creating a home with the proper size and amenities for the area in which you live.
Reason # 1 is easy. You know what you want and why you want it. You want to add a game room, or modernize your kitchen and master bath. You have started a new home based business and need a new office. Regardless of the reason, you know what you want.
Reason # 2 is not so simple. Many people dont even consider it when they remodel or before they sell their home. Taking advantage of conditions to maximize your home’s value is the big focus here.
Simply put, remodel your home so as to optimize your homes potential within the neighborhood in which you live, thereby maximizing the price you can realize on your home. Stating it even more simply, if an improvement that costs a dollar means you can sell your home for two dollars more, you do it. If not, you dont.
Look at these situations:
Adding a third bedroom to a two bedroom home will most times get you your money back. The same is true for adding a fourth bedroom to a three bedroom home. Add a sixth bedroom to a five bedroom home? Not likely. There isn’t much demand for 6 bedrooms so the price from 5 to 6 would be marginal at best.
You have a 2,000 square foot home. There are homes in your neighborhood over 3,000 sq ft. The market in your neighborhood will bear the price commanded by a 3,0000 sq ft home; you should not be concerned at all about losing money on adding 1,000 sq ft to the home.
If the average cost per square foot in your area is $180 and you pay $120/ft for the additional 1,000 sq ft, you’ve realized a profit of $60,000. Not bad! Also, modernizing will enable you to command a higher per sq ft price than what is typical for most home sales in that region.
In both scenarios you create value in your home by building it to its Maximum Potential.
Visit FinishingTouchRenovations for more ideas about Bathroom Remodeling Indianapolis and any of your other remodeling needs.
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