Home Improvement: Determining How Much to Spend

Published on Nov 28, 2013 06:15 am

It’s very rare that your new home is exactly how you want it when you buy it — even newly developed houses may need to be tweaked to suit a particular buyer’s tastes. Home improvements can range from something as simple as a fresh coat of paint to something as complicated as changing the layout to add new rooms or increase the size of existing rooms.

How much should you spend on improving your home? The answer depends on your financial priorities and your budget, as well as what’s selling in your area. If you want to make improvements to your home but don’t know where to start, thinking about where you spend most of your time will help you spend your money wisely. If you like to cook, give your kitchen a makeover; if you’re a movie buff, change your living room to make it more comfortable. Set a budget, and resist the temptation to exceed it.

Smaller, more functional improvements (like upgrading a bathroom) should be completed over time as you have the cash available — they should not put you into debt, which can compromise your personal credit. Homeowners can save money by doing some projects themselves. Visit a home improvement retailer to get expert advice on how to do these projects without having to hire a pro; they have a specialized sales force and website that will walk you through a variety of DIY projects step-by-step.

If you want to sell your home, you can increase its value by making improvements such as installing a new roof, upgrading to hardwood floors, and even increasing the number of bedrooms. Candice Posey, an Atlanta-based real estate agent on the popular A&E TV show “Flip This House,” notes that a 3-bedroom, 2-bathroom home is a hot commodity on the Atlanta housing market. It can cost thousands of dollars to change the layout of a home to achieve this number of bedrooms and bathrooms — because everything from walls to electric outlets need to be relocated — but doing so can increase the value of your home by tens of thousands of dollars in that market. So, in that type of situation, it’s a home improvement that will likely pay off.

To that end, before you start any home renovations, you need to know how much you can safely afford to spend and understand your local housing market. It’s important to research other properties for sale in your area, notes Paul Esajian, who’s also featured on “Flip This House.” He routinely drives around to look at “comps” (other properties in the same neighborhood) to compare layouts and prices of the homes that are selling the fastest and getting the most interest from potential buyers. Once you see what similarly-sized and priced homes are offering from an amenity and aesthetic perspective, you’ll have an idea of what home improvements are worth paying for when it comes to your own abode.

 

About the Author
Ginger Dean is the owner and founder of GirlsJustWannaHaveFunds.com where she empowers women to take charge of their finances.

 

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

Published by permission from ConsumerInfo.com, Inc.  © 2013 ConsumerInfo.com, Inc.  All rights reserved.

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