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Consider these things when deciding whether to improve or sell your home
Home improvement spending continues to increase, in part because of higher costs for labor and supplies. Before you spend a fortune fixing up your home, you’ll need to consider several important factors:
Location: Is your house in a great neighborhood, or has the area gone down in quality since you bought? Asking yourself this question can help you decide whether it’s worth it to hang on to your home or trade it in like a used car.
Budget: Can you afford to make the repairs you need? It may not be worth it if you don’t have the cash to complete the renovations because borrowing the money or using a credit card will automatically up the cost by whatever interest rate you pay. If you do plan to finance the renovation, compare loan or card rates carefully.
Will you recoup the costs? Some renovations will pay for themselves when the time comes; others are just wasted money. Check out Remodeling magazine’s cost vs. value report to see if what you’re planning will pay off.
Will you pay more in taxes? Some home improvements—like an extra bedroom, bathroom, or other addition—will cost you more in taxes the next time your home is assessed. Check with your local tax office to see if your planned renovation has the potential to add to your tax bill.
How do you feel about moving? Don’t forget to consider how you feel about your home before you make your final decision. If it was your dream home and you think you’ll regret your decision later, fixing it up may be the better option. If you plan to stay for years longer, you won’t need to worry about whether or not you’ll recoup any money you spend.
