Home remodeling is on the rebound, and for the first time since 2006, spending on home upgrades is expected to rise. But is spending the money really worth it? Kelli Grant, Senior Consumer for SmartMoney.com, offers some tips on how to updated you home and still stick to a budget.
First, don't expect to recoup your costs. The struggling real estate market means that renovations are probably not going to pay for themselves in added home value. Keep your budget and changes in line with what neighbors have if you're renovating with an eye to sell. Being the only house on the block without a second bathroom or, on the other extreme, the only one with marble counter tops, might not work in your favor. But if you plan to live in your home for years to come, do what makes you happy.
Considering updating instead of renovating. Some rooms may not need a major remodel as much as a look that doesn't scream 70s-era construction. Replacing wallpaper with paint and removing textured "popcorn" ceilings are easy updates to do yourself. Swapping out lighting fixtures, cabinet hardware and faucets also offer a more modern look for your space for relatively little cost.
If you do need a contractor, shop around. As work picks up, so do contractors' prices. Get at least three bids for the job, including two referrals from friends or neighbors and one you found via the Internet or phone book. Ask for the names of customers who whom they completed similar projects. Call those people to ask about the quality of the work and their experience.
Also, it's a good idea to go green. They may not be glamorous, but projects that improve energy efficiency have some of the best returns for your money. Depending on the project, homeowners can cut up-front costs through the state appliance rebate program, and get extra back come tax time with a federal tax credit worth up to $1,500. You'll see fast returns in the form of lower energy bills, and when you're ready to sell, more interest from buyers.
And finally, sometimes all you need to do it clean the house. Aim to complete a few simple and inexpensive upkeep projects each year, such as touching up peeling paint, replacing a cracked outlet plate or securing a squeaky floorboard. That curb appeal pays off at sale. Buyers expect a $2 discount for every dollar of necessary repairs that turn up in a home inspection.
For more on how to save when remodeling, and other personal finance tips, click here.
by Kelli Grant and Jenn Eaker