According to a recent article in the Atlanta Journal Constitution, Americans are expected to spend more than $270 billion, yes billion, this year on home remodeling projects.
Here is a brief summary of the recommendations in the article:
- Get at least two estimates from contractors
- Insist on references and follow up on them
- Pay for your project in thirds; one-third up front, one-third halfway thru and one-third on completion to your satisfaction
- Don’t automatically take the lowest bid (our recommendation- get more estimates if you’re unsure about the ones you’ve received)
- Make sure you have a clear and specific contract defining the scope of your project
- Make sure your contractor has sufficient liability coverage in case they damage your home or a worker gets injured
- Make sure that if you need a building permit for your project, it is in your contractor’s name
An important issue that was not vetted in the AJC article is the decision-making process involved in deciding what you should update or change in your home. Our experience is that generally homeowners make these decisions based on what they want to have in their home, sometimes without considering whether the remodel will add value to their home. Studies show time and again that home improvements never add value equal to the cost of the project. Generally, the best you can hope for is getting back a 70-80% on your investment in home improvement.
We often get calls from past clients asking whether they should go forward with home improvements they are considering, such as putting granite countertops in the kitchen, changing out carpet for hardwood floors, etc. Sometimes our response is clear-cut; for instance, is it really smart to spend $40,000 redoing a kitchen in a home you may only stay in another year or two and which will only give you $10,000 or less in return. More often the answer is less clear; spending a few thousand to have hardwood floors that you will enjoy for the next few years or adding a fence so that you can let your dog run or children play worry-free cannot be measured by value added to your home alone.
Sometimes the best answer is to buy a new construction or resale home- for instance, if you want a Keeping Room off your Kitchen or larger closets, it is not usually financially smart to take on a major renovation to your current home when you buy a newer home that already has the features you want. Remember that a home that already has the features you want is likely in a neighborhood where the other homes are similar in size and features, so you’re paying fair value to live in that neighborhood versus being overbuilt and overpriced in your current neighborhood.
To sum this post up, think carefully about your projects and whether they make financial sense, then do your research on who you hire and finally protect yourself to assure that your home improvements are done to your satisfaction.
I would always get at least 3 refferals with one being someone you know.
Hi,
Great tips to provide for remodeling. If even some of these tips are applied can make a big difference. It’s important to point out here that investing in kitchen ideas will greatly increase the overall value of your property and serve the potential to sell your home fast in the future but also make any current guests and friends feel right at home. We all want a kitchen that inspires the true chef in all of us plus make it the best family room and most of this can be achieved by using excellent kitchen ideas to make the most of what we have available to us.
jully
These are some great tips that I will pass along. I especially like paying in thirds because I still hear stories of people getting scammed.
I’m considering buying my own house, and i have to say that I’m spending a lot of time on finding the perfect house, because i don’t want to remodel it very soon.
Great feedback and ideas here….they are things to think about. Mia, best of luck in your home search!
I do think it is crucial to not get carried away when remodeling your home: as you said, if the investment is greater than the return, don’t do it, no matter how much a certain family member wants it!
Think kitchens and bathrooms. Most of the small renovation projects bring the biggest bang for the buck. New counter tops, sinks, faucets, toilets in the bathroom and paint are small budget projects that you can complete yourself and don’t require permits. Be careful hiring a friend, family member or friend of a friend. Be lead….
I’ve been building for over twenty years and the biggest trap i see people full into is looking at the price when comparing quotes. When what they should be doing is talking to the contractors previous clients, asking questions like; did the contractor finish the project in a timely manner, was the work of a high standard, did they deliver what was promised and most importantly after they were finished did the contractor return and fix any maintenance issues.
The price is important but I would pay more for somebody that delivered what they promised.
Get minimum 4-5 estimates from contractors. Contact even small local builder.
Take your time and go out and control what everything cost in the shops and on internet.
Good tips, Ben and Kathy. Unfortunately, too many owners remodel/upgrade based on emotions, not on fiscal/logistic data. If you are planning to move in a year or two, don’t make costly remodels that are just going to eat into whatever little (if any) equity that you may have.
I agree that a lot of people think they can recoup the cost of remodeling when they sell the house. For some this is possible but most don’t. It was a good point about the 70-80% return.
Great comments all around. With so many homeowners underwater already, to take on a big remodel project is risky from an investment point. Instead, the wise homeowner should plan to make minor changes to keep the home from looking outdated.
I agree with Bruce that if reselling is an option than most should consider the bathrooms and kitchens. You could get more return on upgrading those areas than any other.
I definitely agree with getting more than one estimate. Personally, I call around and get as many rough estimates as I can. Of those companies, I will then look up their Contractor’s license number and make sure that they are legitimate. Being in the service sector myself, I’m fully aware of the amount of people out there that do not have licenses, uses someone else’s license, and/or don’t have insurance. In any case, once I make sure they are legitimate, I go and find reviews of them online. From that, I can usually narrow down the companies to 2-4, I would then try to get a professional quote. The costly the project, the more I research I do.
This are one of the factor that needs to be considered when repairing your new house. This should be firm and well managed!
Remodeling is highly recommended if you intend to stay in that home for a long time. It is not practical to get areas of your house renovated if you have plans of moving out anytime soon. And with the current economic situation, home sales are not exactly booming.
On the other hand, if you have found a remodeling or painting contractor that you really feel good about, but their price is more than you can afford or you simply do not want to invest as much as has been quoted, just explain this to the contractor. A professional remodeling or painting contractor will welcome the opportunity to help you redesign your project or make whatever changes are necessary in order to better fit your budget. As long as you are open to scaling back the project,