House Renovations

5 Questions to Ask Before Investing in a Fixer-Upper

by Brandon Turner | BiggerPockets.com

 

So should you invest in a fixer-upper? Despite a few cons, I would say yes, you should definitely consider it because of the overwhelming pros. However, before you jump into your next project, ask yourself these five questions about the deal.

5 Questions to Ask Before Investing in a Fixer-Upper

1. How bad is it?

There are many levels of severity when dealing with fixer-uppers. Some properties need just a few thousand dollars worth of paint, while others need a complete overhaul. As common sense would suggest, the less work a property needs, the less risk you’ll have that something will go wrong during the rehab.

At the same time, however, the less work a property needs, the more competition you’ll face. This is why I generally look for properties that appear to need a lot of work to the general public but that actually just need minor fixes. For example, homes that have a bad smell because of pets or cigarettes are a prime candidate for me, because smells are easy to rectify. An ugly exterior paint job or a bad roof are also fairly easy (if costly) to remedy, but they scare away more potential homeowners. So, before you buy a fixer-upper, I encourage you really look at the property and have an accurate estimate of what it’s going to take to fix it up. Don’t go into a fixer-upper blind.

 

2. Is it worth it?

Let me ask you a question: Is it better to buy a house for $120,000 that needs $30,000 worth of repairs, or a house that is $150,000 that is 100% finished? With all other factors being equal, the finished house clearly has the advantage. However, many investors fail to comprehend this logic and instead think “fixer-upper” automatically means “great deal.” It doesn’t!

Often, the cost of rehabbing a project will negate any discount you might get. On the other hand, if you could get that same property for $90,000 and put $30,000 into it to make it worth $150,000, now we’re talking!

3. Do I have the time?

Whether you plan to do the work yourself or not, fixer-uppers take time! You have to be present at the property often to make sure the work is being finished correctly, or maybe you’ll end up having to do the work yourself. I have a friend who bought a fixer-upper triplex with plans to live in one unit and rent the other two out, but it took him three years to fix up the two other units and get them rented! While this friend may still have a great investment on his hands, he lost close to $40,000 in potential rent over those three years because he didn’t have time to handle a fixer-upper.

4. Do I have the skills?

Most people who are looking to get started with fixer-upper rental properties plan to do the work themselves. I actually encourage this, as long as the work is on a small scale. Being able to do your own rehab can save you a ton of money and can help you get a good feel for how long projects take so you can better manage the hiring out of those projects in the future. However, if this is your plan, do you really have the skills to take on the project? If not, see the next question in this list.

5. Do I have the drive?

Or more importantly, do you have the mental skills and motivation needed to learn how to accomplish those projects? My first home was a fixer-upper, and I had never swung a hammer in my life! However, I picked up a book on home improvement and began learning on the job. I also called in a lot of favors from other people I knew and had them teach me how to do things. By the end of the project, I could install carpet, tile a bathroom, lay laminate wood flooring, solder copper pipes, and fix a leaky roof—not because I had the skill, but because I had the desire and motivation to learn.

By answering these five questions for every project you are about to take on, you can better decide whether it is the right path for you. Fixer-uppers can be a great way to supercharge your wealth creation, but they also present increased risk. Just be sure to do your due diligence on any fixer-upper you plan to buy and accurately account for the hurdles you might face. Then take action, and get a little dirty!

 

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5 ways to start investing in real estate — even if you’ve never invested before

By Arielle O’Shea, NerdWallet

If you’ve ever had a landlord, you probably don’t dream of being one: Fielding calls about oversize bugs and overflowing toilets doesn’t seem like the most glamorous job.

But done right, real estate investment can be lucrative, if not flashy. It can help diversify your existing investment portfolio and be an additional income stream. And it doesn’t always require showing up at a tenant’s every beck and call.

The trouble is that many new investors don’t know where or how to invest in real estate. So here are five options, ranging from high maintenance to low.

Real estate can be lucrative when done right. Matt Cardy/Getty Images

1. Invest in rental properties

Tiffany Alexy didn’t intend to become a real estate investor when she bought her first rental property at age 21. Then a college senior in Raleigh, North Carolina, she planned to attend grad school locally and figured buying would be better than renting.

“I went on Craigslist and found a four-bedroom, four-bathroom condo that was set up student-housing style. I bought it, lived in one bedroom and rented out the other three,” Alexy says.

The setup covered all of her expenses and brought in an extra $100 per month in cash — far from chump change for a grad student, and enough that Alexy caught the real estate bug. Now age 27, she has five rentals and is a broker and owner of Alexy Realty Group in Raleigh.

Alexy entered the market using a strategy sometimes called house hacking, a term coined by BiggerPockets, an online resource for real estate investors. It essentially means you’re occupying your investment property, either by renting out rooms, as Alexy did, or by renting out units in a multi-unit building. David Meyer, vice president of growth and marketing at the site, says house hacking lets investors buy a property with up to four units and still qualify for a residential loan.

Of course, you can also buy and rent out an entire investment property. Find one with combined expenses lower than the amount you can charge in rent. And if you don’t want to be the person who shows up with a toolbelt to fix a leak — or even the person who calls that person — you’ll also need to pay a property manager.

“If you manage it yourself, you’ll learn a lot about the industry, and if you buy future properties you’ll go into it with more experience,” says Meyer.

2. Fix up and resell properties

This is HGTV come to life: You purchase an underpriced home in need of a little love, renovate it as inexpensively as possible and then resell it for a profit. Called house flipping, the strategy is a wee bit harder than it looks on TV.

“There is a bigger element of risk, because so much of the math behind flipping requires a very accurate estimate of how much repairs are going to cost, which is not an easy thing to do,” says Meyer.

His suggestion: Find an experienced partner. “Maybe you have capital or time to contribute, but you find a contractor who is good at estimating expenses or managing the project,” he says.

The other risk of flipping is that the longer you hold the property, the less money you make because you’re paying a mortgage without bringing in any income. You can lower that risk by living in the house as you fix it up. This works as long as most of the updates are cosmetic and you don’t mind a little dust.

Randy Shropshire/Getty Images for FMB Development

3. Use a crowdfunding service

If you’re familiar with companies such as Prosper and LendingClub — which connect borrowers to investors willing to lend them money for various personal needs, such as a wedding or home renovation — you’ll understand the concept behind investing through a real estate crowdfunding site.

Companies including RealtyShares and RealtyMogul connect real estate developers to investors who want to finance projects, either through debt or equity. Investors hope to receive monthly or quarterly distributions in exchange for taking on a significant amount of risk and paying a fee to the platform. Like many real estate investments, these are speculative and illiquid — you can’t easily unload them the way you can trade a stock.

The rub is that you need money to make money. Real estate crowdfunding is generally open only to accredited investors, defined by the Securities and Exchange Commission as people who’ve earned income of more than $200,000 ($300,000 with a spouse) in each of the last two years or have a net worth of $1 million or more, not including a primary residence.

4. REITs

REITs, or real estate investment trusts, allow you to invest in real estate without the physical real estate. Often compared to mutual funds, they’re companies that own commercial real estate such as office buildings, retail spaces, apartments and hotels.

REITs tend to pay high dividends, which makes them a good investment in retirement. Investors who don’t need or want the regular income can automatically reinvest those dividends to grow their investment further.

REITs can be varied and complex. Some trade on an exchange like a stock; others aren’t publicly traded. The type of REIT you purchase can be a big factor in the amount of risk you’re taking on, as non-traded REITs aren’t easily sold and might be hard to value.

New investors should generally stick to publicly traded REITs, which you can purchase through an online broker. (See the NerdWallet analysis of the best brokers for beginners if you’re new to this world.)

5. Rent out a room

Finally, to dip the very edge of your toe in the real estate waters, you could rent part of your home via a site like Airbnb. It’s house hacking for the commitment-phobe: You don’t have to take on a long-term tenant, potential renters are at least somewhat prescreened by Airbnb, and the company’s host guarantee provides protection against damages.

Before and After: 13 Dramatic Kitchen Transformations

Many people want to change their kitchen, whether it’s because it functions poorly, their taste has evolved or they purchased a home marked by someone else’s style. In fact, “can no longer stand the old kitchen” is the top reason homeowners choose to remodel kitchens, according to Houzz research. If you’re experiencing kitchen fatigue and are looking for inspiration, take a look at these 13 kitchen transformations. Perhaps you’ll find your kitchen soul mate here.
Wood to White
Many homeowners ditch wooden cabinets in favor of white. Our first group of before-and-afters shows four kitchens where this was done, in a variety of styles.1. Raising the RoofKitchen at a Glance
Who lives here: A professional executive coach and a beer distributor, their 10-year-old daughter and two Pembroke Welsh corgis
Location: Groton, Massachusetts
Size: 251 square feet (23.3 square meters)
Designers: Halsey Platt and Diana MacLeod of Platt BuildersBEFORE: The kitchen in this Massachusetts home occupies what used to be a barn, and the low roof meant windows that were just 12 inches tall.

AFTER: The homeowners raised the roof 18 inches, allowing for bigger windows and a proper view. The remodel also exposed some of the original beams, and added new ones to highlight the space’s historical character.

Cabinets: in English Linen finish, Candlelight Cabinetry; Bakes cabinet pulls and Sheraton cabinet knobs in dark antique: Horton Brasses; wall planking: painted in Mayonnaise OC-85 by Benjamin Moore, Boral; rustic glass pendant lights: Pottery Barn; Iron/Tones undermount sink in white: Kohler; three-legged bridge faucet: Rohl; single-drawer dishwasher with panel: Fisher & Paykel

Read more about this kitchen remodel

DIY: Refresh Your Bathroom With a New Sink and Vanity

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Give your ol’ WC a quick update for just a couple hundred bucks and a few hours of your time.

You’re tired of your old, dated bathroom, but not yet ready to do a full-on remodel — it’s a common scenario.

Here is an easy fix that can cost you as little as $200 and about an afternoon’s worth of time: a new vanity/sink combo.

An updated sink and vanity will stand out and draw the eye to it, instead of to other bathroom elements that may be less than perfect. And if you happen to be replacing an old pedestal sink, you will instantly give yourself more storage space.

Many vanity styles are available at your local home improvement store. They come in all shapes and sizes to fit just about any bathroom, even the tiniest of rooms. Some models even have a matching mirror to help you complete the new look of your bathroom.

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A new vanity can add personality to even the smallest powder room. Courtesy of Zillow Digs.

The best part is you can save a lot of money by doing the installation yourself. Here are tips to help get you started.

Selecting a vanity/sink combo

  • Consider the size of the room and the space you have available for the sink. You want to select a vanity that not only fits in the room, but also is in correct proportion to the room and the other elements within it. For example, you may not want to put a tiny vanity in a spacious bathroom with lots of light. The same is true of the opposite scenario: Be wary of putting a large vanity in a small bathroom, even if the room technically has enough space for it.
  • Select a vanity that coordinates well with the style and color scheme of not only the bathroom, but also your home overall, and any future updates that you may have planned for down the road.
  • Make certain to purchase a vanity that has no back. This will make it much easier to fit the cabinet around the plumbing, and provide easy access for the installation.
  • Don’t forget about the faucet! In most cases you will need to purchase your faucet separately. Be certain to pick one that is an “easy-install” faucet.

Installation tips

  • Allow enough time to complete the project, especially if this is the only bathroom in your home.
  • Before beginning your project, make sure you have all the tools and materials you need at hand. It’s also a good idea to check the box that the new sink/vanity came in to make sure that all fasteners and hardware are there. There is nothing worse than getting halfway through a project only to find that you’re missing a screw or a drawer pull.
  • Install the new faucet into the new sink prior to installing the new vanity.
  • Plan for the removal of the old sink. For example, if the new vanity is a different size than the old, you will most likely need to touch up the wall paint in the area, and possibly even repair parts of the wall.
  • It never hurts to have a helper. You may need help with removing the old sink and putting the new one in place.

With your new vanity installed, your bathroom will look and feel newer and better, and you will have the pride of having done the job yourself.

How to Flip a House (and How Much Money You Can Make)

By Margaret Heidenry

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Stephan Zabel/iStock

Ah, the house-flipping dream. Buy a run-down home, fix it up, put it on the market—and profit, big-time! Flipping may have hit its peak in the bubble years leading up to the 2007 housing market crash, but this is one dream that definitely hasn’t died. However, just because you’ve watched a lot of HGTV doesn’t mean that you know how to flip a house.

Earlier this year, RealtyTrac reported that homes flipped in the first quarter of 2016 had yielded the highest average gross flipping profit—the difference between the purchase price and the flipped price, not counting renovation expenses—in 10 years. The magic number: $58,250.

But just how much money you make will hinge on taking the right approach—so be sure to check out these pointers on how to flip a house. For real.

How to find a worthy house to flip

“Stick with the age-old adage of buying the cheapest home in the nicest neighborhood,” says Eric Workman, senior vice president of marketing at Chicago-based Renovo Financial, a private lender specializing in the house-flipping space. But don’t pick just any old shack—look for a home with  “good bones,” Workman says. Translation: one that’s structurally sound, has a decent roof, newer windows, and an HVAC system that’s less than 10 years old, as well as modern electrical and plumbing.

Next, a flip should need only cosmetic changes such as new cabinets, countertops, flooring, and paint.

“These renovations can usually be done without the delays of permits, plus the upgrade costs will be relatively fixed, helping to eliminate unforeseen expenses,” says Workman. And always look for homes in neighborhoods close to public transportation or in good school districts as they tend to sell quickly.

How much should you pay for a house you’ll flip?

Your goal should be to make a 10% to 20% return on your investment. So how do you crunch the numbers? For starters, find out what your fixer-upper will sell for once you’re done with it by looking at the sales price for similarly sized homes in the same neighborhood that are move-in ready, says broker Bobby Curtis at Living Room Realty in Portland, OR.

Let’s say, for instance, that homes in tip-top shape in the area sell for $300,000. To get a ballpark figure for a run-down house, cut that price by three-quarters (75% of $300,000 = $225,000). Then subtract the cost of repairs (if repairs cost $30,000, that would be $225,000 – $30,000 = $195,000). That’s about the most you should pay for your flipped house without cutting too much into your profits.

As for financing a flip, it isn’t that different from buying a regular home. You’ll either pay cash or take out a mortgage—just consider going for a 10- or 15-year mortgage, which will offer a lower rate. After all, odds are you won’t own this home for long anyway.

How fast should you flip?

Don’t kill yourself (or more accurately, flip yourself into an early grave) to rush the flip. But also note, you don’t want this house sitting around for long. Curtis recommends looking for a place that will take four to six weeks to renovate. A short deadline ensures you’ll buy and sell the house in that same housing market. Plus, owning a house for less than two months keeps costs like interest and taxes at a minimum.

This means that finding contractors who do quality work quickly is key to your success. For that reason, it’s crucial that you do your due diligence before you hire one: Make sure to meet with at least a few contractors, get their license number, references, and an estimate of what they think renovations will costs. Keep an eye out for red flags—e.g., contractors who ask for money upfront or in cash aren’t playing by the usual rules, and might be trying to take your money and run.

That said, you should accept the fact that the cost of repairs will almost always run over. As such, “you absolutely, positively must overbudget” so you have a financial cushion for those inevitable cost overruns, says Joseph Chiera of The Realty Cousins of Poughkeepsie, NY. Design backups will also help with budget shortcomings.

“If you’re planning to use high-end hardwood flooring priced at $5 per square foot, have a nice backup at $2 per square foot.” Here’s a list of renovations and how much they pay off at resale.

 

The Worst Home Renovation Advice You Might Actually Try

By
Margaret Heidenry

tear-down-wall-sledgehammer

 

There’s a ton of terrific, true, and essential home improvement advice out there. “Measure twice, cut once” comes to mind. Ditto “Pick remodeling projects with the best ROI.”  But “Screw contractors, do it all yourself”? Not so much.

Bottom line: There’s some very, very bad advice out there, fighting for attention along with the good. And much of this misdirection may actually be trotted out by friends and family who mean well. Unfortunately, good intentions won’t keep your home from becoming seriously messed up.

So before you pick up a hammer, make sure to check this list of the worst home renovation advice you might be tempted to try. Then slowly back away from the toolkit and think twice! Maybe even three times.

‘Tearing down a wall is no big deal’

Why you might hear this: That half-wall into the dining room is just that: half a wall. Tearing it down seems like a cheap and easy way to open up tons of space. They do it on “Property Brothers” all the time! Like, every week!

Why it’s bad advice: Some walls may not look it, but they are indeed structural, meaning they’re holding up the floors or framework above. And what’s in those walls—electric and plumbing—can make ripping into one on par with opening a vat of Maori eels.

“Water, drain, and electrical lines may be inside,” says Nancy Dalton of Seattle’s Baywolf Dalton, a design/build firm. Always have a professional determine the implications of tearing down a wall and what’s required by code—or you could be in for “significant sticker shock.”

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‘Update to what’s trendy’

Why you might hear this: If a home improvement design is in vogue, it must be good—and could boost your home’s value if you’re looking to sell.

Why it’s bad advice: Just because something is popular doesn’t mean it’s appropriate for your needs. Be open to input. Just “never let anyone talk you into a renovation that you really don’t want or don’t like,” says designer Pablo Solomon of Austin, TX.

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‘A historic home needs to be modernized’

Why you might hear this: If a house is historic, it’s bound to feel stuffy and old-fashioned unless you do a 100% rehab.

Why it’s bad advice: Eliminating the historic appeal or character of a home—think tearing out original woodwork, built-ins, and claw-foot bathtubs—is one of the worst things you can do, according to Realtor® Matt Forcum with Century 21 Realty Concepts in Effingham, IL.

While completely updating an older home may appeal to certain homeowners, those changes may result in a house whose interior style doesn’t match the exterior, or that doesn’t match the character of the neighborhood. This makes it “a market outlier” and might drag down the value of the property and the speed of sale.

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‘Replace your worn-out wood floors with something easy to clean’

Why you might hear this: Your hardwood floors look like a Louisville slugger after the World Series. Putting down laminate or wall-to-wall carpeting is an inexpensive fix.

Why it’s bad advice: “Unless you’ve had significant water damage, it doesn’t take much to replace hardwood flooring,” says Luis Leonzo with TableLegsOnline.com. And ripping out old floors may actually lower the value of your house.

“The older the home, the higher the quality of hardwood, which might have cost $20 a square foot when it was built. Replacing the flooring with laminate or carpet at $1 a square foot is like reupholstering your leather couch with canvas!”

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‘Use the best-quality materials—and by that, we mean the most expensive’

Why you might hear this: Hey, whatever costs the most is the very best.

Why it’s bad advice: While some pricey new countertops can improve a home’s value, outrageously expensive renovations will rarely pay off, according to Morgan Franklin of United Real Estate Lexington in Kentucky. Instead, Franklin suggests finding nice granite for $35 to $50 instead of marble that would run $100-plus a square foot.

“In the eyes of the appraiser and the next buyer, there isn’t much difference,” Franklin says. Bottom line: When considering upgrades to a home you plan to sell in the future, understand what value the market places on those upgrades.

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‘Just do whatever your gut tells you’

Why you might hear this: You know what you like. Besides, it’s your home and your money.

Why it’s bad advice: Sure, in some cases you can renovate however you see fit, but it’s far wiser to understand the pros, cons, and realistic costs of each renovation you want to undertake.

Too often “people don’t research the facts as to what renovations actually will pay off in a higher resale value for their home,” says Solomon. A good place to start is to check out these renovations that really pay off.

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‘You can always DIY!’

Why you might hear this: You’ve watched a ton of HGTV, right? And so you pretty much understand everything from framing to finishing.

Why it’s bad advice: This all comes down to the size of the project. Don’t shy away from a renovation you’re capable of doing yourself. But attempting one you’re not up to can turn into one giant mess. And what you think might save a few hundred dollars upfront can cost thousands if a contractor has to fix your work. When clients ask him if they can tackle projects themselves, says Joe I. Human of Designs by Human, it usually means “more work, delays, and generally subpar quality.”

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6 Tips to Help You Survive Living Through a Remodel

Julie Laughton, Designer and General Contractor

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Allergies will most likely be triggered when construction dust is everywhere in your home during a remodel. Demolition and drywall sanding can cause airborne dust that can be hard to keep under control. If you are planning on living in your home during a remodel, you must be prepared for due diligence and what you are willing to tolerate.

Unless you are tearing your home down to the studs, most people who choose to live in their house during construction can survive the process with careful planning. Don’t wait until the job starts to assign your designated living space and get situated within your home. You also have to be prepared to get ahead of the dust before the remodel begins. Here are the ways I help contain the dust and keep my clients’ homes clean. Use these tips and pass them onto your general contractor.

1. Pack Like You’re Moving: Your house should be clean before the remodel begins. Get rid of everything except the things you want to keep. Pack like you’re moving. Wrap and store belongings such as knick-knacks in boxes, because if construction dust gets on them, they are a nightmare to clean. They will feel like new again once the remodel is complete and they are unpacked.

2. Create a Zone: During a remodel, homeowners and pets must stay away from the construction area. People often forget that a railing is not there anymore and they can accidently fall. For the safety of the homeowner, the work area should be blocked off. We create a zone by building temporary plywood walls with doors on them. We build a separate entrance so that the crew is not crossing paths with the residents and we also blow the dust off the workers clothes with an air hose before and after they enter the home.

3. Zip The Walls: Since the workers have to walk in and out of the room being remodeled during construction, I find that using a zipper instead of a tape entryway is better. We attach plastic sheets to painter poles and place a long zipper at the opening. This creates a re-sealable entrance and exit. The crew can enter the construction area easily through a zipper entrance and it will keep the dust contained in the work area. When the homeowner comes to check out the construction progress, we supply them with a mask and stop work immediately.

4. Set Up a Temporary Kitchen:
When doing a kitchen remodel from scratch, I help homeowners set up a temporary kitchen somewhere else in their home. I have seen people do this in the living room, den or garage. Set up a table with your microwave, toaster oven, toaster, coffee maker and a small refrigerator.

5. Broom Sweep Clean: Each day at the end of the job, we make sure that the rooms that were worked in are clean and spotless. We also clean as we move from room to room after completing the work. We use sawdust with light oil called ZEPs HD Sweeping Compound. This compound stops small dust particles from flying around while sweeping. We put it on the floor before we sweep. Once the dust is swept into a pile, it can be vacuumed with a Shop-Vac or shoveled away.

6. Spray Down The Dust: Once the sawdust in the house has been contained, we put it into buckets. When transferring the buckets to a dumpster or trash truck outside, dust can get everywhere as the workers walk through the house. It can also blow around in the air outside and get on everything, including a neighbors’ car. We take careful steps to contain it by using a fine mist spray pump to apply water on top of the dust after its put into the buckets.

Addison’s Wonderland blogger Brittany Hayes gives home tour — See Inside!

14 Best Remodeling & Home Improvement Ideas To Increase Your Home’s Value

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If you’re looking to improve your home, of course you have to consider several things. First of all, will this improvement satisfy and fulfill a need? It’s important that you answer it truthfully because home improvements are generally expensive so at least make sure you are aware of your needs. In addition, will you be able to afford it? There are a lot of home improvement ideas, some affordable and some are expensive. The good thing is depending on your need, there’s usually an affordable and more expensive option.

Another Factor to Consider

The factors listed above are for the present. As a homeowner, you also have to consider the future. In this case, you have to consider how this improvement is going to help you in the future.

It’s not just about making sure that this investment will last a very long time. Hiring a reliable contractor can help make sure of that. You also have to consider how it’s going to affect your home’s resale value. This is true even if you’re not really planning on selling your home. Who knows what the future holds?

If you’re going to invest in a home improvement project, at least make sure that it will help increase your home’s resale value. This way, you’ll be able to recoup a good part of your investment when you do decide to sell your home later on.

The Best Home Improvement Ideas

Here are the best home improvement ideas that not only satisfy and fulfill a specific need but also help increase your home’s resale value:

  • Garage door replacement
    This is actually something that you can do right now because it’s very affordable. On average, it will just cost you $1,595 to have a better looking (and functioning) garage door. It will increase your home’s resale value by $1,410 so that’s an investment well spent.
  • Vinyl siding replacement
    Curb appeal matters when it comes to determining a home’s resale value and vinyl is king when it comes to siding. Spend $12,013 on vinyl siding replacement and based on the national average, you can expect to recoup 80.7% of your investment when you sell your home later on.
  • Wooden deck addition
    A wooden deck is not only beautiful; it’s highly functional as well. This is why it’s not a surprise that it improves the home’s resale value by $8,085. Not bad for a $10,048 investment.
  • Minor kitchen remodel
    The kitchen usually makes or breaks a deal so make sure that you’ll have a kitchen that prospective buyers would love. Homeowners spend $19,226 on average for a minor kitchen remodel but they’re able to recoup 79.3% of their investment because buyers are generally willing to pay $15,255 more because of the remodeled kitchen. Here’s a REALLY minor kitchen remodel that yielded major results!

Other Ideas

Check out this infographic by Contractor Quotes to learn other home improvement ideas that can improve your home and increase its resale value.

 

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6 Surefire Signs It’s Time to Sell Your Home

By Angela Colley

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Paul Bradbury/Getty Images

Most people don’t plan on living in their first (or second or maybe even third) home forever, but knowing when the time is right to put that baby on the market can be tricky.

In fact, it can feel kind of like breaking up with a longtime boyfriend or girlfriend. Deep down, you knew you wouldn’t be with that person forever—but ending things can be way easier said than done.

Sometimes life changes force the issue: There’s little reason for self-doubt or trauma-level angst if you’re relocating to another state or you know your newborn twins won’t fit in your one-bedroom bungalow. But without a pressing reason staring you in the face, it can be hard to know when you’ve outgrown your home.

So how do you know when it’s the right time to let go?

1. You’re feeling cramped, and you can’t add on

Your family might not be growing, but that doesn’t mean your lifestyle still fits in your current house.

If you’ve started working from home, for example, or you’ve adopted an extended family of indoor cats—or maybe you’ve just never gotten over your dream of having a sewing room—your house might be too small.

But before you jump to conclusions, see if paring down your possessions works to free up some space. Another option might be to finish an attic or basement, add another room, or even add a whole story to your home. But, of course, that won’t work for everyone.

“If your property isn’t large enough or your municipality doesn’t allow it, moving to a bigger home may be your best option,” says Will Featherstone, founder of Featherstone & Co. of Keller Williams Excellence in Baltimore.

To decide which route to take, check your local building laws and get estimates from two or three contractors. It also wouldn’t hurt to check with your Realtor®. Sometimes adding on won’t increase the value of a home, and you don’t want to make big-time improvements that will bring only a small-time return on your investment.

2. You have too much space

On the other hand, perhaps you’re feeling overwhelmed by vacant rooms and silence. (Hello, empty nesters!)

“In this case, it no longer makes sense to have, say, four bedrooms and a basement,” Featherstone says.

Saying goodbye to a family home can be difficult, but you should consider how feasible it is to stay. If yardwork and house upkeep are getting to be a little too much, or soaring utility bills are cramping your style, it might make more sense to move.

3. You’re over the neighborhood

Maybe you can no longer deal with the rigid rules of your homeowners association, or perhaps your neighbors turned their house into a rental for frat guys. Whatever the reason, neighborhood dynamics can change dramatically over time.

And sometimes, you can change. Maybe the 40-minute commute to work didn’t seem like such a big deal the first few years, but now you’re dreading it every day. Or your kids are getting older, which can be a big problem if you’re not in the right location.

“If you can’t afford a private school system, you are limited to one school for your children,” Featherstone says. “Moving may be a benefit to your child’s education.”

4. Remodeling won’t offer a return on your investment

Giving your kitchen or bathroom a face-lift can make your house feel like new again, which might be all you need to decide you want to stay put for years. But that doesn’t mean it’s a financially sound decision.

“Before making significant improvements, you should really study the neighborhood and know the highest price point of your neighborhood,” Featherstone says.

If your home is already similar in style and condition of some of the priciest homes in the neighborhood, remodeling might be a bad idea, and you should consider selling instead.

5. You can afford to sell

Sure, you’re going to make money when you actually sell your house, but as the adage goes, it takes money to make money. So seller beware: You probably won’t be sitting around and waiting for the dollars to roll in.

“Before you consider selling, you should have the funds available to prepare your home for sale,” Featherstone says.

Most sellers need to make some minor improvements such as painting, landscaping, or updating flooring to get a good price on their home. Those costs will come out of your pocket at first, so it’s a good idea to have a cushion before you start.

6. You’re ready to compete

If you’re living in a seller’s market, you might be enticed to offload your home before things cool off. But don’t forget—once you sell, you’ll probably be a buyer, too.

“If your market is hot, your home may sell quickly and for top dollar, but keep in mind the home you buy also will be more expensive,” Featherstone says.If you’re going to get out there, you should make sure you’re ready to compete.