Many people are under the impression that home improvements are good investments that pay for themselves when a home is sold. However, this is wrong according to Remodeling magazine and the National Association of Realtors.
The sad truth is that most improvements will not come close to paying for themselves. Some projects, such as room additions and upscale remodeling, are considered dollar drains according to the 2010-11 Cost v. Value Report. The annual survey compares construction costs estimates with resale value estimates across the country. In 2005, renovations would recoup their costs on resale. Now, almost non do.
A homeowner with long-terms plans to settle down and stay for a long time should remodel however he/she sees fit. Construction costs are down. The nest reason to remodel is to enjoy the home and live there, not to sell a property for more money. There is no guarantee that you will recoup those funds and this report backs up that statement.
Another drawback is that many home buyers want remodel themselves and make the home their own. Potential buyers will likely have different tastes also.
The report recommends that if a Seller is going to shell out funds on improvements, to focus on the exterior of the home. Windows, garage door and siding replacements offer decent returns and are also the least personal of many improvements in a home. These fixes can also boost energy efficiency, offer potential tax savings and increase curb appeal.
Lastly, if a Seller is looking to improve how well a home shows, the best fixes are fresh paint, replacing old carpets, using neutral colors, bringing more light into the home and making sure the property is clean and neat.