A home is a kind of investment that makes put everything you have into it – buckets of cash, time, effort, and all of that goes with emotional investment.
Whether you own property to live in it or for investment, taking care of your property is your responsibility, among others.
Earlier this month, we pointed out that how the costs of home remodeling have dropped to about 10-15% while material costs have gone up by about 17%. With cash at play here, it’s important to realize how and why you should renovate your home, if at all. Is it an opportunity or is it akin to draining money out?
It’s an opportunity if….
Your home is up for sale
The basic structure of trading hasn’t changed for centuries: buy low and sell high. Somewhere in between, however, there ought to be some value for whatever it is that you want to sell. If it’s about selling your home, the value comes from land, the location, and the home itself. Home renovation adds value to your home. Home renovation is like adorning your home and dressing it up for a premium sale. Successful real estate flippers make it a point to renovate homes before flipping it up for resale.
As a homeowner, think of the cost you put down for renovation as an investment to add value to your home. The better it looks, the more it sells for (everything else being equal).
Real estate properties get ratings such as A+, A-, B+, B-, C+, C-, D-, and F. The higher the grade allocated to your property in the market, the more premium it’d command.
Your home is ready for you to rent out
No one wants to take a home for rent if the walls creak, the paint falls off, the whitewash screams for a redo, and if the house is in a mess (generally speaking). Just as you’d remodel or renovate your home for selling (for a one-time price), renting out your home would need just as much attention (for the recurring, monthly rent that you stand to receive). Work on areas within (and just outside) your home, check for plumbing and electricity, pest infestation problems, and many other nuances that homes usually come with.
…Or just when the time is up for renovation
Assuming you are not pushing your home out to the property market and also assuming that you are not renting it out, your property needs regular maintenance anyway.
Unless you sell the property, you’ll always have the responsibility for maintenance and upkeep of your home (exceptions being specific clauses you might mention in your rental or lease deeds). Periodic inspections, repairs, and occasional renovation or remodeling is crucial to keep your home the way it should be.
It’s a money pit when…
When it’s a white elephant
Don’t put too much money into a home that won’t fetch you much in the market post-sale. According to a post by bankrate.com on MSN Real Estate, you don’t put money into a “white elephant”. If the home values are falling in your area, there’s no point in dumping $300,000 into a house that won’t be worth $250,000. Homeowners are investors. As with any investor, it makes sense to look into macroeconomic factors, real estate trends in your state/city or even the entire country.
When you are doing it all wrong
Finally, you’d spending on home renovation for nothing if you are doing it wrong. The folks at HGTV point out that a few of the mistakes homeowners make while renovating their homes such as to use cheap materials, skipping the prep work, using inaccurate measurements, ignoring lighting, etc.
Home renovation is an expense or an investment depending on how you go about it, and when you do it.
What do you plan to do?
Author Bio : Frank Pipolo is President of FP Internet Marketing a certified Internet marketing consultant, professional marketing advisor to new home builders, real estate agents and brokers, and writer for WCICommunities, a community developer of golf homes florida. He has more than 20 years’ experience partnering with clients to build their business through development and implementation of track-proven Internet marketing strategies.. Follow him on Google+