One of the unfortunate realities of home improvement is that you aren’t likely to get back as much as you put in. Even some of the best home remodeling moves, like installing a deck, probably won’t increase the value of your home enough to offset the cost.
It’s true that many remodeling efforts, like upgrading countertops and re-doing the bathroom, can increase the value of your home, and even make it more sellable. However, your true ROI will probably be rather low.
But does that really matter in the long run?
Other Reasons to Upgrade Your Home
Not too long ago, my husband and I spent around $5,000 (paid for up front and out of pocket) to re-do the flooring in our home. We put wood in the front room and the kitchen, and we re-carpeted the whole house with high-quality carpets that we love. Even though the move probably didn’t increase the value of our home significantly, we are likely to receive the following two benefits from the move:
- Increased enjoyment of our home: The way we feel about our home increased by a large margin. Our home is rather modest in size, and the installation of pretty new flooring spurred us to clear out a lot of the clutter. So, our home is less cluttered. On top of that, we love the new floors. It has changed the whole look of the inside of the house, and it’s one we like. It’s spruced things up, and the psychological effect has been huge.
- Better sellability: We are likely to move something in the next 18 to 24 months. At that time, we would probably have had to offer a flooring allowance to sell the house. Now, though, with the high-quality materials, that probably won’t be necessary. The house looks nicer with the new flooring, and that will make it more sellable. And, as a bonus, we get to enjoy the flooring for a time, rather than just putting it in for the next inhabitants.
Upgrading your home doesn’t have to be just about the ROI. Just as buying a home (as a primary residence) shouldn’t be seen as a true financial investment, you don’t need to view making home improvements as an investment in the value of your home.
Emotional Investment
Don’t forget that we make emotional investments as well as financial investments. In many cases, the returns we receive from such emotional decisions is likewise emotional. The satisfaction we derive from the new floors, and the increased quality of life, makes the “investment” worth it for us — even though there will probably be a net loss overall, we are happy with the floors.
When evaluating the “worth” of a home upgrade, consider the emotional impacts as well. No, we probably won’t come out ahead on our home when we move. However, our son has had the benefit of a safe and stable place to live, and there’s a great deal of satisfaction involved in arranging the house and the yard the way we want to.
What do you think? Do you sometimes make financial decisions based on emotional returns?
If you’re on the cusp of remodeling your home, you probably have a fairly good understanding that it’s going to be an involved and expensive process. You can reduce the hassle, however, if you take some advice from those who are more experienced than you are, and learn from their mistakes. Remodeling your home doesn’t have to be a bad experience, as long as you avoid a few common but often costly blunders.
I’m not a big fan of remodeling homes. I’ve done some work, but being in construction, I can always get “scrap” material for free, so the cost is $0. A lot of pf bloggers and people on the web show off pics of remodels and I usually think that the “before” pic looked just fine. I think people are always looking to move up, do better, have more, and all that… and it sucks. When can people be happy with what they have? Right now, just as it is now.
We plan on doing little things that won’t have a huge return. If it makes us happy though and doesn’t cost a WHOLE ton, then we are fine with that 🙂