Many homeowners are opting toremodel their current homes, ratherthan trading up to a larger house.Renovations can be as basic as finishingoff a basement to expand living space, orthey can take a more extensive approach,such as the installation of home theatersor wine cellars. Whatever shape remodelingtakes, today's low interest rates makeit a good time to finance the cost.
Prices for most renovations have heldsteady, according to a recent report. The renovation demand isstrong in high-priced metropolitan marketslike Boston, San Francisco, and NewYork, because the cost to remodel beatsthe alternative of buying a larger house insuch cities. The National Association of theRemodeling Industry (NARI; www.remodeltoday.com) predicts that Americans willspend $163 billion on renovations this year,up 3.5% from 2001 and 8.7% from 2000.
Besides adding to one's enjoyment ofa home, remodeling also increases itsvalueâ€”an important advantage to have ifyou decide to sell. Kitchen and bathroommakeovers, in particular, bring the highestrate of return. According to magazine, on average, homeowners canexpect to recoup approximately 80% oftheir investments in major kitchen andbathroom remodeling. Master bedroom,sunroom, and family room additions alsohave high rates of return.
THE IMPORTANT QUESTIONS
Locating a good contractor is key torealizing the best rate of return, as well asgetting the best results. Before signing acontract, take the time to compare severalcontractorsâ€”checking with friends orneighbors is often a good place to start.Get estimates from at least 3 contractorsbefore proceeding. When budgeting for arenovation, experts suggest you leave a5% to 10% margin for any unexpectedexpenses. If you are having major renovationsdone to your home, you may needto add in the cost of temporarily rentingan apartment or staying in a hotel.
NARI also recommends that you conductinterviews with the prospective contractors.Some important questions to askin your interview include the following:
Getting answers to these questions willhelp you select a contractor who is rightfor the job and right for you.
HOME IMPROVEMENT TRENDS
Experts see home renovations takingon an increasingly technological face.According to the report, high-techchanges are already visible in today'skitchen and bathroom makeovers. Forexample, the latest refrigerated range canboth chill food and heat it up. Additionally,some sinks can convert intodishwashers for easy cleaning.
Whether your goal is to make a homemore livable or to increase resale value, becareful not to overimprove. Accordingto Leslie Brooks, president of the MassachusettsBoard of Real Estate Appraisers,"If the house is in a neighborhood of flatranches, there is a limit to what people willpay for a flat ranch, no matter what is init." Talk to your local real estate agents oruse the Internet to research the prices ofhomes in your area.