Improvements

• Home Improvements ( 0 Articles )
  This Section Deal With Home Improvements
• Remodeling That Makes Sense ( 1 Article )
  

  The price of materials is rising, so pick your project carefully.
  
  Short of a killer-force hurricane blowing your house away, it's hard to imagine a worse experience as a homeowner than tackling a big remodeling project. So why do we do it? You could credit all that home equity sloshing around, which qualifies us for cheap construction loans. Or the joy we get in investing in a fast-appreciating asset. Or maybe it's because of Ty Pennington, the genial host of Extreme Makeover: Home Edition, who seduces us into believing it will be easy.

  Payback time

  You need to recognize at the outset that few projects pay for themselves when it comes time to sell. The average payback has ranged between 79% and 86% in recent years. The best returns come from redone bathrooms and kitchens, which recover 90% to 93% of costs. A couple of exceptions apply. When home prices rise rapidly, well-done projects often pay for themselves immediately, says Don Hewie, Real Estate Coach & Broker. A project might also return more than 100% if it involves bringing a house up to the standards of the neighborhood, he says. Big paybacks come from remedying deficiencies that will cause many buyers to skip your house. As examples, Don cites adding a deck to a home in a neighborhood where decks are common, and building a second full bathroom.
   One of the best ways to spend your remodeling dollars is to rehab your old home into your dream house. You'll avoid paying what may be an inflated price for a new home, and you won't have to give up your old neighborhood -- the friends, the schools and the great commute.Here's what the experts say buyers prize most:
  
  Kitchens: 
  All the brokers interviewed -- consistently mentioned one popular item: kitchen countertops made of granite or a quartz-based synthetic, such as Silestone or Zodiaq. At about $50 to $80 per square foot, the quartz-based surfaces are similar in price (and sometimes in appearance) to granite. Both are far more popular with home buyers than laminates, such as Formica, which are still acceptable in entry-level homes.
  
  Stainless-steel appliances appeal to many buyers, but relatively few willing to pay extra for top-of-the-line professional appliances, such as a Viking range, which can cost $10,000. For that to pay off, you've got to find a gourmet.
  
  Some good old-fashioned thrift when it comes to updating kitchens. Some of the older houses actually have nice wood cabinets. You can rejuvenate a kitchen simply by sprucing up vintage cabinets with new hardware and a coat of clear varnish, and replacing the existing countertops with granite. You'll save big because wooden kitchen cabinets are expensive to replace.
  
   Bathrooms:
  The old-cabinet, new-countertop trick works with bathrooms. It revitalizes your whole bathroom instantly.
  
  Even if you prefer to take showers, make sure there's at least one bathtub in the house. There needs to be a place where small children can be bathed. Large walk-in shower stalls in the master bathroom are especially attractive to mature home buyers.
  
  Floors:
  Updated flooring, all things being equal, increases a home's value by 5% to 11%. Buyers want to see some type of stone -- usually travertine (a variety of marble) or limestone. Those materials cost about $3 to $11 per square foot, uninstalled. Wood floors also register with buyers. Not fake wood floors but real wood floors. Laminate floors, such as Pergo, sound hollow underfoot and turn off many buyers. Real wood costs about $6 to $10 per square foot, uninstalled; Pergo costs less than $4 per square foot and is easy to install. Don't even think about vinyl. Vinyl floors are a turn-off, even in the lower price ranges.
  
  Mud rooms: The humble mud room, once a way station between the outdoors and the kitchen, has become a hot item for remodelers and buyers in many parts of the U.S. These utility areas have grown into tony rooms with built-in wooden cabinets (which everyone calls lockers) for stowing items for each family member, whether a briefcase, backpack or diaper bag. There should be shelves or tables near outlets where digital cameras, iPods and Game Boys can be charged. Some even have dog showers (often just a drain pan on the floor with a hand-held shower head).Costs for a well-equipped mud room can be minimal if you outfit an existing space with new cabinets and countertops from a discount store, such as Ikea. Or a mud room can be as elaborate and expensive as a smaller version of your kitchen.
  
  The increase in home value, however, may be slight -- perhaps only 1%, according to Sirmans's study. But Sirmans's research may not reflect the recent trend toward the mud room as a family command center.
  
  Patio:
  Remodeling jobs that yields the biggest boost in value with the smallest investment is adding a deck or patio to an older home. (Expect an 87% return on investment, according to Remodeling magazine.) If you can turn an existing window into a French door that opens onto a deck or patio, you get a two-fer: You'll not only create access to a new, outdoor living space, but you'll also allow more light into the room. It make the room feel bigger. And although the investment is greater, he believes the space grows even more valuable if you turn a patio into a sunroom with glass and screens on three sides.
  
  Focus on the view from the street, where many would-be buyers make their first, brutal assessment of a home. In particular, a new front door with raised panels and slim windows along the sides "really makes the front of your house pop," he says. (Figure about $1,000, plus installation.) Improvements to the landscaping and front walkway could add more value than their relatively modest cost -- if the rest of the house is in decent shape.
  
  The overall lesson for homeowners: To get the most resale bang for your remodeling buck, chat with some real estate agents to see what's currently in favor with buyers. Be skeptical, though, about the opinions of designers and decorators, whose cutting-edge ideas may not appeal to the broadest range of buyers.

  Financing a remodel

  Deploying your home equity wisely is the key to financing a remodeling project. Interest on up to $1.1 million in debt used to rehab or purchase a house is tax-deductible.
  
  Home-equity loan:
  
  Because you receive the loan proceeds in a lump sum and pay interest on the entire amount right from closing, these loans are best suited to one-shot projects. Typically, you can borrow up to 90% of your equity for a term of ten to 15 years. Interest rates are usually fixed and run higher than rates for a first mortgage. Recently, loans to purchase a house were running about 6%, and home-equity loans averaged between 7.1% and 7.5%.
  
  Home-equity line of credit:
  A line of credit is perhaps the easiest, cheapest way to borrow. The interest rate is variable and typically tied to the prime rate. If your credit rating is good, you pay the prime rate, currently 6.75%.
  
  Although you can get a large line of credit, you tap the funds only as needed and pay interest only on the amount outstanding. That makes this type of financing a good choice if you plan to remodel over time.
  
  Remodeling loan:
  If you don’t have enough equity for a home-equity loan or line of credit, you may qualify for a specialized remodeling loan. A remodeling loan is also helpful for a project that will cost $50,000 or more because the bank adds a layer of fiscal responsibility to help you manage the loan.Banks will approve these loans on the expected value of the home after improvements. To make sure the home actually attains that expected value, the lender will require that the builder submit a breakdown of expenses. When the work reaches certain benchmarks, such as completion of framing, the bank will approve a loan request allowing payment to the builder. Before releasing payment, the bank sends an inspector to confirm that the work has been done.

• Lasting Remodeling Value ( 0 Articles )
  

  Find out how certain features affect the value of your home, and how long you can expect appliances, water faucets and other house components to last.
  
  

   Remodeling projects can add value to your house. Below, see how certain features in your home can affect its price -- either positively or negatively. Then scroll down to see how long you should expect appliances, countertops and other home components to last.
  

  FEATURE ADDED VALUE Extra bedroom 4% Extra full bath 24 Half bath 15 Cathedral ceiling 2 Skylight 3 Den/study 7 In-law suite -5 Elevator 10 Laundry in basement -2 Brick siding 0 Vinyl siding -3.5 Stucco siding 10 Wood siding 8 Utility/mud room 6 One fireplace 12 Two fireplaces 29 Kitchen island 5 Double oven 9 Patio or deck 2 Garage for 2 or more 14

  
  Source: National Center for Real Estate Research; G. Stacy Sirmans, David A. Macpherson, Florida State University.
  
  

  How long should upgrades last?
  

  It's not your imagination that things around the house start to break down after about ten to 15 years. That's the expected lifespan of many components of today's homes.
  
  Expect to last ten to 15 years:
  Dishwasher, disposal, microwave, clothes washer and dryer, fiberglass bathtub/shower, laminate countertops, carpeting, gas or electric water heater, wooden deck, asphalt driveway.
  
  Expect to last 15 to 20 years:
  Kitchen cabinets, central air conditioner, most furnaces or heat pumps, high-quality water faucets, gas or electric range.
  
  Expect to last 20 years or more:
  Granite countertops, brick/concrete patio, concrete walks, enamel/steel or enamel/cast iron sinks.
  
  

  Expect to last practically forever:
  Floors made of oak, pine, slate, Terrazzo or marble. Brick and stone walls.