I've always heard that remodels were worth less than you put in but I've been watching My House Is worth What

Question

and they are saying that , for instance , if you remodel your bathroom for $4000 that you'll see a double your return.Is that just hype are is it true ? I live in the middle area of Illinois .

Answer 1

Too much HGTV can go to your head :)

I think it's probably a bit true. When buyers go shopping for houses, they want updated kitchens and bathrooms. It does make the value go up, a real estate agent would wind up appraising it higher if you've just put a new bathroom in. However, I'd be careful with the state the housing market is in, you don't want to over-extend yourself.

Answer 2

It depends. Depends on what you remodel, how you remodel, and where you remodel; just like everything else in real estate it is a LOCAL market and what your market is doing.
First consider your market and what the avg. house has in it, what the market values are and what buyer's expect or like to see in a house. Think about things like, a 8 bedroom house with 1 bath will NOT sell good in ANY area but a 3 bedroom/ 1 bath MAY get higher value if you add a second bath. The 8th bedroom will not add value if it is a neighborhood of small 2 bed/1` bath houses.
Next, what skills do you bring to the table and can you provide the PROFESSIONAL labor neeed to do the project. Labor typically accounts for 1/2 the cost of a home remodel project so if you have free labor then you can "make" money upgrading a house.
Next is where you spend the money on the house, adding pools in Alaska will not usually get a high market return on the investment. Usually upgrades in kitchens and baths will see the biggest return on investment upgrades while pools, hot tubs, ponds, in-wall fish bowls, and other "person taste" items will not pay you back what they cost you. Do you REALLY think that other people will be impressed with the money you spent painting ALL ceilings black if you are into that sort of thing? Just because you like something does not mean another person is going to pay big bucks for it; but most people WILL pay extra for granite countertops IN THE RIGHT COLORS, stainless steel appliances, but NOT the stainless steel handcuffs custom built into the bedroom ceiling.
And do not "overbuild" the house; if you spend a million dollars "upgrading" a house in a area where the top of the market is 200K then you will NOT recover your costs.
The trick is to find a 100K house in a 300K neighborhood, put 50K into remodeling and then selling for 280K. THAT is how you make money on upgrades. Spending 300K on a house in a 250K nieghborhood and then adding 100K is not good business.

Answer 3

It's hype. The only way you can get back double your money is if you contribute all the labor by yourself. However, any contractor paid renovation won't return a value increase dollar for dollar.

Answer 4

Statistics show that the best rooms to spend money renovating are your bathrooms and kitchen.
The stats also show you get about equal appreciation as you spend on those rooms.

For other repairs, you usually don't get the amount of appreciation that you put into it. Otherwise, we would all spend money fixing everything and then sell our homes for much more money....right?

Answer 5

It depends on your neighborhood the market in your area.

Remember that most of those shows are reruns and taped before the market collapsed.