Saturday, September 22, 2007

Fireplace Remodeling and Return on Investment, Part Two

Part one of this article defined R.O.I. (return on investment) and gave some tips on determining if an improvement project was right for your home and your future plans. In part two we will explore several projects that offer high returns on your investment.

Investing in your home should be an ongoing process. Certainly large, costly improvements such as adding rooms increase your home’s resale value, but you should also consider smaller projects—especially do-it-yourself jobs like painting or remodeling an ugly fireplace. Often a smaller investment offers a bigger percentage return, especially in the short run.

Here are three areas where you can make a big difference with a small to moderate amount of time, money and elbow grease:

1. Maintenance. It’s not glamorous, it’s not exciting, but it might just the best thing you do for your property. If a potential buyer wants an inspection, that inspector is going to find any outstanding maintenance issues, and the buyer might want to fix these or take the cost off your asking price. Worse—they might walk away.

Always stay on top of the following:
  • Leaks – A stitch in time saves nine. Fix a leaky roof or a plumbing leak before you get any water damage. This will certainly pay off in the long haul. As a preventive measure, check your roof for loose roof tiles and damaged flashing.
  • Fireplace – Check for cracks, chipped brick or other damage. Clean off soot and smoke. Clean the firebox or repaint the firebox black. Be sure to use approved heat-resistant firebox paint.
  • Furnace – Replace filters regularly.
  • Gutters/DownspoutsClean out any clogged gutters. If your spouts are loose or disconnected, secure them before water gets into your walls (causing paint to blister and peel) or pools around your foundation (causing cracks or seeping into your basement.) Replace damaged gutters.
  • Foundation – Repair foundation cracks immediately. Locate the cause. If part of your foundation is sinking, you may need to dig it out to repair it before the damage gets worse or spreads to the structure of your house.

2. Exterior. First impressions may not be everything, but the way your house looks as a potential buyer pulls up sets their expectations. A house that looks good from the street makes a potential buyer want to see more. (Real estate agents call this “curb appeal.”)

Pay attention to the following if you want your house to look great from the outside:
  • Paint – Often the first thing a potential buyer sees. Damaged or faded paint makes a bad first impression, giving your house a “fixer-upper” feel even if the interior is perfect. If a paint job is in order, the buyer will probably deduct this cost from their offer.
  • Vinyl Siding – The same is true for siding. Try pressure washing to clean dirty siding, but do not be afraid to replace it if necessary. Siding usually provides a good return on your investment (85%-90%) and it helps sell the house.
  • Lawn – Well-maintained lawns improve the appearance and value of a property. You don’t have to manicure it down to the last blade of grass or spend lots of money, but a few well-chosen plants and flowers along walkways or in front of windows can work wonders.

3. Interior. Buyers often imagine themselves living in a home they are looking at, mentally arranging furniture and placing possessions, but they don’t necessarily want a blank slate. If you are still living in your home when you put it on the market, keep it neat. If the house is unfurnished, you should still have the basic elements (lights, doors, fireplaces) already in place. It should look ready for someone to move in.

Here are some projects for the interior of your home:
  • Walls – Paint the walls. This instantly makes a room feel clean, vibrant, and updated. Light colors usually work better in living areas and kitchens or any room that doesn’t get much natural light. If you decide on a dark color, try white or a lighter, complimentary color for the trim. Paint the walls yourself to save money.
  • Kitchen – Buyers take note of kitchen remodels, but you do not have to redo everything to make an impact. Think about it one component at a time—a new sink or cooking station might give you a better return than all-new appliances. New countertops can rejuvenate a kitchen. Try under-cabinet lighting or a ceramic tile backsplash for an upgrade you can do yourself.
  • Fireplace – Fireplaces are big draws for buyers. If the fireplace in your house is ugly, paint the fireplace brick for a quick project you can do yourself in a single weekend. With a fireplace paint kit available for about $200, you can achieve an upscale, “real brick” look—and give yourself a nice return.

Whatever you decide on, always consider the bottom line. And don’t forget that investing in your home can add to your family’s enjoyment as well as adding resale value.

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