How to Get Your Money Out of House Additions & Renovations

Make the right changes to your home to recoup costs.

Building an addition onto your home or making renovations can help you to increase the value of your home. This is essential in a market where it's difficult to sell a home. However, while you can recoup some of the cost of renovations, you shouldn't expect to recoup 100 percent of the costs. Still, by making upgrades, you can enhance your own enjoyment of the home and make your home more attractive to buyers.

Instructions

1. Make a list of all potential renovations and additions. For example, you could add a porch or a sunroom to the home or replace old windows and kitchen cabinets. Look at your house as though you were a buyer, and try to find the things that would turn you off, like an old furnace or water heater.

2. Calculate the cost of each type of renovation. Some things you may be able to fix yourself, but others may require professional assistance. Your cost should reflect both parts and labor.

3. Choose the additions and renovations that are most urgent. Some renovations, such as granite counter tops, are merely cosmetic. Others, such as a 20-year old roof, are likely to be deal breakers. When someone looks into buying your home, they are also thinking about the expense to repair something that breaks.

4. Think of ways to decrease costs while still making the renovations you want. For example, you may be able to paint cabinets and change the handles rather than installing a new set of cabinets. Alternatively, you may also be able to create an outdoor patio from bricks rather than add a sunroom to the home.

Tips & Warnings

• Ask your Realtor which changes are most pressing. She'll have more insight into what types of renovations make a difference to the home buyers, which can help you to avoid paying for renovations that don't matter.

• You may be eligible for tax credits if you make renovations that make your home more energy efficient. Ask your tax adviser if you qualify.

• Avoid renovations that won't appeal to all buyers, such as creating a home office or a game room for kids.

References

• MSN Real Estate: Ten Upgrades to Help You Sell Your Home
• Bankrate: Upgrades that Help Sell Homes