Remodeling? It's a waste of money

Liz,

 

   I think that it would be best for you to do a little bit more research before you sit down to the key board and start typing just to meet a deadline.   As a hurricane IKE victim living on Galveston Bay with a house built on stilts 15' above sea level, I still had 1.5 feet of water in my home.   Now 14 months after the storm ( it took 11 months for me to get all of my insurance money) I am almost finished with a very nice complete remodel project which started with new tile floors on up to new carpet in the loft bedrooms.   I plan to live here for another year or two then I will sell.   The local real estate market home values and recent sales in the area will bring me a sales price 3 X the amount of what I paid for the house just 4 years ago.  The house was built in 1963...now everything is brand new, plumbing and wiring are up to code and I know that I will indeed get a good return on my remodel investment.

 In reality, renovating is consumption spending.

 

Lets take it a step farther and add that buying a home is consumption spending.We can just rent and do away with all the expenses of owning.

 We can all live in dated buildings that have the Harvest gold appliances,and put our savings into gambling on stocks,or get ourselves a Bernie Madoff to handle our new found wealth.

Buying Appliances is not considered Remodeling in my book.

 

Ideally, you should pay cash for consumption. The only time it makes sense to borrow money is when you're buying an asset that stands a chance of gaining value over time.

 

In the long run,home improvements have increased value and help the return  and marketability when selling.

 

Sounds pretty definate,without considering all the data that contradicts this statement.

 

 

Well here we go again.  I have been a professional renovator for 40 years.  Liz you are still wet behind the ears!  I have done thousands of renovations from new homes to 100 year homes and everything in between.  The one thing I have never come across is that a owner is doing a renovation to get a  payback.  People simply like to enjoy upgrades to their homes.  Any increase in value is fringe.

One customer recently told me when I mentioned how much a specific renovation costs; "I don't care what it costs. This is what I want"

Your comment about never add additions to your home is miss guided.  Would you put you elderly mother in a home or add an addition or other living space?  Since you hold no stock in renovations I wonder what you would do. 

I agree and disagree with some of the information in this article. I believe that people should invest their money in projects that are energy efficient. I sell home improvements for sears and have had one of the best years since I have been with the company, 4.5 yeras. I believe siding, windows, entry doors, attic insulation, roofs, and HVAC are a must since they improve energy efficiency! Kitchens are a want not a need and I never understood why they have yielded the most return, probably because I'm not married..lol. If the kitchen and baths are in good condition, leave them alone and give the future buyer a choice on what they want to do.

LIz

You have looked at this the wrong way, or at the least you have not looked at both options. How much have I invested to live "here". No one who is going to sell within 1 year should ever do a major remodel prior to selling, they will never recouped the $ invested. "But" someone who has found the right neighborhood, or someone who has lived in the house for 10-15 years have paid down their mortgage and really wants to update, add on and adapt the home to their current lifestyle would be far better off remodeling than selling and buying new. Example originally you paid $65,000.00 for your large new house in 1980? Family 2 kids 1 dog? Paid down the mortgage only a couple years left on the note, now you want to add adult space, new master suite, sunroom  ect. That type of remodel will run in the neighborhood of $170,5000.00-$200,000.00 in our area of the midwest. Now put the original $65,000.00 purchase price on top of that and you have an investment of $240,000.00-$265,000.00 to live at this property, usually this property has mature trees, stable neighbors less turnover than the new production areas. Now take your sell the house and buy new you first have to "upgrade" the old home to attract the new buyer (expense) pay a realtor to sell (expense) move (expense) more than probably change-decorate new house (expense) settle for smaller lot, houses closer together and of course you get the included pear tree in the front yard for landscaping. Really after all of this you don't even have enough money to buy your old house back? Or is it better to move to an area buy another house generally in the neighborhood of $300,000.00-$350,000.00 to get same amenities as you are going to get if you remodeled, i.e. sq. ft. lot size ect.

When looking to remodel you really need to set down, decide what you want from a home, can we achieve here what we need, are we going to live here for a very long time and can we stay in the house as we age?

There are a lot of questions to be asked and answerd prior to moving forward with a decision like this, so to simply say remodeling is a waste of money is not correct