Tuesday, July 7, 2020
League of Power

The League of power

"Freedom by Friday"

Don’t Expect a Return on This Investment

Home Renovation Realities

Mr. Patterson and I are considering expanding our family. We’d love to add to our brood but like with any major life decision there are options that need to be weighed.

You see before we could add a little bundle of joy to our household we would need to find space for our little Patterson bambino. I work from home mostly. Currently my office is in one of the bedrooms in our modest, three bedroom home. If we decide to add to our clan we would need to move my office to make room for the baby.

Sticking my desk in another room like the family room or living room isn’t an option for us. I require a quiet, calm environment to work. Preferably a room with a door so I can shut out all the distractions. Fortunately we do have a small room at the back of the house that was built to be an informal eating area. We have always eaten at our bigger, formal table that is right off the kitchen though so this room gets practically no use as it sits now. So it makes sense for us to turn this room at the back of the house into my new office.

While it may make sense to renovate this room, it doesn’t necessarily mean it’s the best move. Home renovation projects can cost thousands of dollars and upset the lives of home owners for months at a time. On top of that most renovation efforts lose money. The average return on investment is only two-thirds to three-fourths of the cost of the improvements when you sell your house.

Take for example landscaping or an outdoor garden. Most of us have been told that investing in the outdoor curb appeal of our homes will yield us a one hundred percent return on our investment. That’s just malarkey. Rarely does ANY home improvement project make you back your entire investment.

According to HGTV’s show Bang for Your Buck homeowners on average recoup 60-75 percent of their landscaping investment. Fancy gardens, expensive fences, stone walls all look nice, but home buyers aren’t willing to pay more for them. To get the most bang for your buck make sure your landscaping plans include converting your backyard into useable space. Patios, spas, pools, decks, seating areas are all sound investment ideas because they add useable outdoor space to your home.

Renovating a garden or tool shed in your backyard may seem like the perfect way to add more useable space to your home, but they rarely pan out the way the homeowner intended. The most common renovations to these buildings are for the purpose of turning these buildings into a home office or man cave. But homeowners find that they use these rooms a lot less than they intended too. Trudging back and forth across the lawn to use the bathroom or to get a drink gets old really quickly. Plus these buildings are rarely able to maintain their temperatures in winter and summer. Most times, renovators regret pouring money into these buildings. 

Another common renovation that rarely pans out the way the homeowner intended has to do with your attic space. A lot of homeowners dream of turning their unused attic space into additional bedroom space, home office, or into a game room. The reality is most attics have low ceilings and are quite cramped except for in the center of the room. Homeowners rarely budget for improvements such as moving duck work, reinforcing the floor, moving a staircase, or central air to the space. All of these hidden costs can really add up. The average attic renovation can easily run you $35,000 plus. Although if you do it right and the room doesn’t feel like an attic after you renovate you can expect to get back about 75 percent of your investment.

The biggest eye opener for me when researching home improvement projects is how much return you can get from even doing basic renovations to your kitchen. Even a few simple improvements to your kitchen can pay handsome dividends. Improvements like updating the flooring, staining or painting tired looking cabinets, adding granite countertops, and replacing cabinet hardware can make a big difference in appearance and the value of your home.

If you are planning to totally remodel your kitchen stay away from trendy designs and unconventional built-in appliances. Warming trays, cappuccino makers and wine fridges look cool but their expensive price tag rarely recoups its investment when it comes time to sell your house.

It’s also easy to overspend on high-end appliances. After all what’s $5,000 for an ultra-high-end refrigerator when you’re total renovation budget is $55,000? Fancy, overdone kitchens in modest, middle-class neighborhoods will not keep their value in the long run. Instead keep the materials in line with your neighborhood and go with classic designs. Expect to recoup between 70-100 percent of your kitchen renovation.

In the end you need to make sure you renovate carefully. Don’t let your eyes get bigger than your wallet. It’s easy to turn a small remodeling job into a huge makeover. If you want to redo a room in your house make sure the end result will add a more functional space to your house, or bring an old house up to date. Don’t assume that whatever money you spend will make your house that much more valuable. Ultimately, when you decide to renovate your home it’s best to do it because you will enjoy the end result, not because it will make you money.  Remember, there is little reward for having the fanciest house on the block.

Good luck!

Keeping Money in Your Pocket,

Nancy Patterson

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