Choosing the right kind of investment can be a tricky subject to broach.
In general, you want to look for the highest return with the lowest amount of risk. One avenue that more people seem to be exploring is investing in their home. A home remodeling project can improve the quality of your life by adding necessary features to your home. But it can also boost your home's value, which in turn gives you additional equity at your disposal.
Don't just settle for any sort of home renovation. Do your research, plan ahead and calculate what will bring your family comfort and help the resale vale of your home.
Nab a large return on investment
According to industry experts, one of the top remodeling projects for return on investment is a kitchen renovation.
"People buying a house look first at kitchens and baths," Kermit Baker, director of the remodeling futures program at Harvard University's Joint Center for Housing Studies, told This Old House.
While kitchens can be one of the most costly rooms to remodel, they are the most likely to pay for themselves at the time of resale.
"If you take $20,000 and spend it judiciously on a kitchen, you can make it look a million times better," Jim Cory, senior editor at Remodeling magazine, told This Old House. "The design and product selection are key."
This Old House reported that adding rooms to your home is another way to net a significant return on your investment. Larger homes tend to net bigger prices, so adding a family room, guest bedroom or master suite will add to the square footage and hopefully your checking account down the line.
Interior designer Jan Zimmer told The Times Herald, a Michigan based-publication, that finding the right renovation project for your home is often the most trying task during a remodeling period. Zimmer urged prospective renovators to visit show rooms and trade shows to help stimulate their creative juices and give them a better idea of what's available within their budget.
One trade show that offers great ideas and money-saving tips is the Las Cruces Home & Garden Show in New Mexico. The annual event puts emphasis on environmentally friendly renovations that can save you on utility costs and add value to your home.
"We wanted to bring in themes that focus on the green aspects of building this year, including through renovation, retrofitting, new building, high efficiency and green products," Steve Chavira, director of the Las Cruces Home Builders Association, told the Silver City Sun-News. "We have an area we're calling the green mile that will focus on building green, but it will be a theme throughout the conference center."
Expecting the unexpected
Home renovation projects tend to take more time to complete than planned, according to Zimmer. Most of the time, delays occur because of weather conditions, supply shortages, worker conflicts or hidden problems that you weren't aware of.
Zimmer said that research shows more than 20 percent of home renovation projects cost more than expected.
If you're midway through your project and it starts to cost more than anticipated, don't panic. The last thing you want to do is skimp on material costs.
Steve Watson, host of HGTV's Don't Sweat It, said, "One of the biggest mistakes that people make when it comes to home renovation (is that) they try to be cheap when they buy materials. The bottom line is, you're going to get what you pay for."
If you can't afford to pay for the right materials, take a step back and wait until you can. Don't settle for subpar materials, because that will hurt your resale value in the future.
This icon indicates a link to third-party content. By clicking on the link, you will leave our website and enter a site not owned by the bank. The site you will enter may be less secure and may have a privacy statement that differs from the bank. The products and services offered on this third-party website are not provided or guaranteed by the bank.