While You Might Not Recoup The Cost Of Remodeling Your Current Home, Maybe You Should Do It Anyway!


While You Might Not Recoup The Cost Of Remodeling Your Current Home, Maybe You Should Do It Anyway!
By Scott Rogers • September 22, 2021
As I pointed out yesterday... Most Remodeling Projects Will Cost More Than They Will Add To Your Home Value But... that's not to say that you shouldn't consider remodeling your home... and it certainly doesn't mean that you should just trade up to a nicer home rather than making those improvements to your current home. Let's explore the numbers a bit using one of yesterday's example as a starting point... If you spend $100K on a home improvement project, you are likely to only see a $50K to $75K increase in your home's value. Dialing in a bit, let's imagine this is your scenario... Current Home Value = $400,000 Cost of Contemplated Renovations = $100,000 Increase In Home Value Based On Renovations = $60,000 Post Renovation Home Value = $460,000 Improvement Cost Not Recouped = $40,000 So, given that of your $100K spend, you would not be recouping $40K of the money -- should you just trade up to a nicer home instead? Not so fast... Your costs of trading up to a new home might actually be more expensive than the money you "lost" in doing the renovations. Here are some approximate numbers, imagining an upgrade from a $400K home to a $460K home. Preparing the house to sell = $1,000 Transactional cost of selling the current $400K house = $21,000 Transactional cost of buying a new $460K house = $14,000 Moving costs = $3,000 Costs of any changes or improvements to new house = $5,000 So, there with some very rough estimates, you can see that we made it up to a $44,000 cost to trade up from your current $400K home to a new $460K home. So, before you get overly depressed about spending more on your home renovation than you might see in an increased home value -- just keep in mind that it might be a very reasonable path forward as compared to selling your current house and buying a new one. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 21, 2024 (unless otherwise noted).
Comments (0) or Subscribe