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If I’m living in the home, I use up one month of its value every month. Quantitatively, every $10,000 is currently worth about $100 a month over ten years. So if I am willing to pay $300 a month, I might as well go ahead and remodel the kitchen. If I am willing to pay $600 a month, I might as well go ahead and finish the basement. For $100 a month, I could fix up a bathroom pretty nice! I might spend a half hour a day in the bathroom, or 15 hours a month, so for $6.50 an hour I can do that in a $10,000 nicer bathroom :-).
Adding a master bed and bath & increasing the square footage by 50% (from a 3/1 to a 3/2, with office space in master) immediately increased the value of my home by $100k… the addition cost $65.
As others have stated, when viewed from a strictly financial perspective, it almost never pays off. But, occasionally it does. When we were selling my husband’s bachelor pad condo, the neighborhood had gentrified and yuppies were snatching up snazzy condos. But non-improved units fetched a much lower price because yuppies didn’t want to do the work themselves. The kitchen in the condo was from the 80s, and cheaply done. Also it was small. It was so small that we didn’t have to spend a lot on materials; even good cabinets and granite don’t add up to much in a 10 x 7 space. We found a good contractor to install the cabinets and a few new appliances and gained about $50,000 on the sale.
Bottom line: it pays to evaluate the financials in each case.
We’re remodeling our kitchen, ground level flooring, and fireplace. We live here, and it is for us to enjoy. I don’t worry too much about it as an investment or something that we’re doing for the next buyer. We don’t plan to move any time soon. So, yes, it is worth it because it’s what we want for our home.
If by remodeling I can avoid the hassle and cost of moving, it’s worth it.
In my 90 year old house, every “remodel” has ended up being a “rebuild” of some element of the house that was falling apart behind the plaster. To the degree that the things I find wrong would prevent my house from lasting another twenty or thirty years, that’s worth it.
Still, I don’t kid myself. The next owner might decide to take down my house to build their own dream. If I redo something, it’s because of some longstanding annoyance or a current need.
The big question is how one defines worth. Nearly always there is some type of satisfaction from the changes or improvements. Nearly always that is not monetary gain. I’m working on remodeling and redecorating now. By the time it’s all done inside and out we’ll be north of $100,000, but, for a while, I will no longer hear “we need to” so Yup, it’s worth it.
We all know the studies and stats on how renos are largely negative-returning investments. But there’s more to it than that. My folks recently renovated their kitchen. My 70-year old mother just really wanted new countertops and cabinets since she works from home (from her kitchen table). For her, the changes are a form of consumption and enjoyment (once finished). My father was not so high on forking over $20k+ for the project, but I’ll leave it at that.
Just doing a reno right before selling is probably not the smartest thing to do. Just repaint some walls for cheap and leave the rest to the buyer.
Bottom-line: the money is probably a losing deal, but the enjoyment factor can make it worth it. Like so many things, it just depends on the person and situation.
I think a lot of projects are ‘worth it’ if you can do them yourself. I’m in the process of fixing up our current home. I’ve painted every interior wall (and many ceilings) and am in the process of painting the exterior. I suspect it would have cost at least $15,000 to pay someone to do what I’ve done for the cost of paint (maybe $500 total) and a few supplies ($200). I suspect my work will pay off handsomely next year when we sell. The house is now a nice blend of neutral colors rather than a 1980’s blend of sage and forest green.
From the literature I’ve read, you recoup the cost of virtually no home improvements other than certain cosmetic projects like a new coat of paint. And with many major projects, you will recoup a fairly low percent (40-50-60% as I recall).
We’re currently planning a major kitchen remodel ourselves, not as a financial investment but rather for our own enjoyment (and because I’ve been promising same to my wife for about a decade!). We intend to stay put in our home till they carry us out, so it makes sense for us.