Posted July 21, 2010 by

Payback is a ..... 3 to 5 year time frame on remodels.

The final piece of advice from Money’s article on getting a great return on home improvements deals with the time it takes to recoup the value of your investment.  Only a few years ago the payback on a home improvement project was virtually instantaneous, however homeowners are now looking at 3 to 5 years as the new payback time (some people might argue longer considering we are still in a down market).  Or maybe 3 to 5 years after the market picks back up...  

Beyond necessary repairs and improvements to prepare a home for sale, don’t embark on a major remodel or home improvement project if you don’t plan on staying in your home for at least another 3 to 5 years…. You probably won’t recoup your investment or make money on it.  Although again this advice can differ market to market and house to house, but with a declining or flat market gaining on it isn’t a guaranty. 

On a side note, that 3-5 year time frame is also often the time frame to recoup the cost benefit of buy down points on your mortgage.  So buy smart and buy to stay in your new pad for several years.

Finally the article brings up the fact that with the slow market there are plenty of contractors looking for work and ready to make a deal.  Bids are down substantially from 1 to 2 years ago with contractors slashing their profits, but the cost of supplies is down as well.  Steal is at an all time low.

Remember to get several bids and check back for my next blog on contractor negotiations and tips….  In the meantime check out myremodelingproject.com.

Source: Garskof , Josh. “Six Ways to Ensure a Project Pays Off.” Money January/February 2010: 58-59.   

Please contact me if you have any questions about this blog, any of my previous blogs or are interested in buying, selling or renting a new home!  Bonnie@RogersHealy.com or 214-794-0306

Hope to hear from you soon!  Cheers, Bonnie