Don’t think that just because real estate is in a depressed state that it is not a good tome to improve what you have. It is an outstanding time indeed. If you want to see things the way that the few who profit from these times do, stick with me for a few minutes.
A home has historically been the best place for the average person to acquire wealth. Some investment vehicles like stocks have typicl returns of around 10%, but as we’ve all seen real estate investments can double in an incrediblyly short time. Unfortunately, as weve just experienced, it can also go down rather quickly.
Don’t remodel your home except for these 2 reasons:
- You want to better your living condition and the enjoyment of your home.
- You want to treat your home as the investment it truly is and maximize it’s potential.
Reason # 1 requires very little reasoning. You know what you want and why you want it. Your children have gone to college and you want to convert old bedrooms to more functional space. You get a new position with a company in some other region and you cna telecommute but need an office. Whatever the reason, youve got a good idea of what you want.
Reason # 2requires you to think a little more. Many people dont even consider it when they remodel or before they sell their home. We want to take advantage of economic conditions and get a better value from our investment.
To put this in easier terms, we want to remodel or upgrade the things in our home where it makes sense in the neighborhood the property is situated. Putting it in more basic terms, if we can get more during the sale of the home than it cost for the improvement, we do it. If not, forget it.
Let me give you some examples:
Adding a third bedroom to a two bedroom home will generally be at least a break-even situation. The same is true for adding a fourth bedroom to a three bedroom home. Add a sixth bedroom to a five bedroom home? Not likely. There isn’t much demand for 6 bedrooms so the price from 5 to 6 would be marginal at best.
You have a 2,000 square foot home. Several homes in your area are over 3,000 square feet. The market in your neighborhood will bear the price commanded by a 3,0000 sq ft home, so you could add 1,000 sq ft to your home and command the same price or more.
If homes typically sell for $180/sqft and it costs you $120/sqft, youve realized a $60/sqft profit, or in this case, $60,000. Don’t forget, modernizing will will almost always get you more per square foot than what is typical for most home sales in that region.
In both these cases you create value in your home by developing it to its Maximum Potential.
Visit FinishingTouchRenovations for more ideas about Indianapolis Painting and any of your other remodeling needs.
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