Wednesday, January 30, 2013

The Pros and Cons of Home Renovations

If you're thinking about selling your home, and your home is in less-than-stellar condition, you might be thinking about renovating or redoing certain portions of the house. Maybe the kitchen needs new appliances? Maybe the wood in the front porch is starting to rot? These are standard home upgrades, but they can be a bit trickier when preparing to list your home on the market. Before you do, consider the risk involved with investing the money and effort needed to properly fix-up or upgrade a portion of your home. Sure, redoing an out-of-date bathroom might pull the market price above the cost of redoing the bathroom, but what about a full kitchen? 

When looking at remodeling a portion of your home for sale, think about these pros and cons. 

Pros 

There are several small things that can be done to a house to help raise it's retail value. A fresh coat of paint, some new carpet, even new covers to electrical outlets can make the house (as a whole) more appealing to a new buyer. These are simple projects that you can usually do without employing any extra help. There may even be large scale projects, like replacing a faucet, toilet, or bathroom tiling, that you could also do. If your home improvement project is something you can do, then it's likely something that's worth it. 

There are trickier things to consider, as well. Major projects like bathroom or kitchen renovations are costly ventures, usually taking weeks to complete and requiring the employment of a construction crew or contractor. While this can be a big investment, if your house is far out of date, updating the less-than-appealing portions of it can help you make a profit once you list your house on the market. 

Cons 

The biggest drawback to renovating your home for sale is that it's a long term risk. You can spend a lot of time and money bringing your kitchen up to date, but you might not see a return on that investment for several months or years. Are you financially prepared to invest thousands of dollars into a project, without promise of seeing any profit in the near future? 

It's a risk, that's for sure. It's something that should be looked at on a case-by-case basis, because there are a lot of factors in play. In this market, it's risky to put time and money into your house in the hopes of getting a higher listing price. If you can afford to wait on the money to return, or if the project is small and inexpensive, then it might be worth considering. However, if the project would be too costly and offer too little return, it's likely a better idea to list your house as a fixer-upper. 

Like all things, making the decision to work on your home in any capacity is one that should be informed. Take your time, talk to a professional, make an informed choice. Selling your house as a fixer-upper might just be more profitable than fixing it up.