Making improvements to your home should include two considerations: the benefits they will make to your quality of life and the benefits they will make to the resale value of your house. In some cases, you can achieve both goals with the same improvement. In other instances, you’ll have to make a choice. Creating a checklist to evaluate your potential improvement options will help you make the right choices for creating a long-term home improvement plan.
Quality of Life vs. Investment
Start your home improvement plan checklist by listing the potential improvements you can make during the course of the next few years. Mark each one as an improvement you’ll make to improve your enjoyment of your home, one that will improve your resale value or one that will do both. For example, creating a man cave might improve your quality of life, but it might not improve the resale value of your house as much as making your house more energy-efficient.
Once you have your list of potential improvements, calculate the costs to make each. Meet with contractors to determine the costs of labor to install items you purchase, such as a low-flow toilet or energy-efficient dishwasher. Get bids on work that includes the contractor supplying the materials and doing the work, such as a bathroom makeover or adding a deck. Include the costs of any construction permits you will need to get from your city or town, and contact your insurance company to determine if your premiums will increase. Put the costs associated with each improvement after each one on the list you previously created.
Return on Investment
Project the return on your investment for each improvement. For example, adding solar panels might cost $10,000 or more but will reduce or eliminate your energy bills, potentially allow you to generate income from excess energy you sell back to your power company, and immediately increase the value of your home. Contact your public utilities to learn ways to reduce your heating, cooling and water bills. This can include strategies such as replacing your water heater with a model that comes with rebate from your gas company, installing a programmable thermostat, or installing energy efficient windows and doors. Work with a real estate professional to determine the effects specific improvements will have on your house, based on your market.
Some projects will be more involved than others, taking more of your personal time and longer to complete. Some DIY projects can you take months or longer, while others need to be performed by a professional contractor. Break down the process of completing each project to help you plan which you will pursue. For example, re-doing your bathroom yourself might require research into which products you will buy, online and in-person comparison shopping, meetings with contractors for advice or to perform part of the work, ordering your supplies and performing the work. This can help you determine if that fun DIY project the two of your are considering has the potential to go wrong, biting you in the budget and forcing you to call a contractor to bail you out.
Rank your list of potential home improvement projects in three ways: by cost, return on investment and quality of life. Review your list to determine the order in which you’ll undertake projects as you live in your house through the years. These priorities might change over time as you welcome new additions to the family, consider a transfer or increase or decrease your salary.
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