Fill the Money Pit Wisely

Um, yeah…you’ll need more than that.

They say the average US household has lost 40% of its wealth in the last 5 years, largely due to plummeting home values.  Often, when people can’t sell, they renovate. Either they are trying to make the house they are stuck in more livable, or make it more attractive to a potential buyer. And no matter what they spend, they tell themselves it’s not an expense, but an investment.

It’s the magic phrase uttered by almost anyone who’s ever considered the cost of home remodeling: “We’ll get it back when we sell.”  Unless you keep those projects practical, though, you might just be kidding yourself.

Then they list the types of remodels you might want to avoid:

  • Home Office: Will cost you up to $29,000 but you’ll only get 46% back upon sale.
  • Backup Power Generator: Hey, they had that windstorm in Ohio a couple of years ago, and my mom was without power for 2 weeks! But this once-in-a-blue-moon convenience costs about $15K, and you will get back 45.8% upon sale.
    Adding a Sunroom: Costs $75K, and you will get back about half of that.
  • Upscale Master Suite Addition: Succumbing to HGTV envy will cost you upwards of $220K and, again, you could make half of that back.
  • Adding a Bathroom: $20K to $40K, depending on your tastes, and a 53% return.
  • Garage Addition: Dad’s dream is expensive, up to $90K, and you will get a 54% return.

There’s more at the original article, so check it out!


2 thoughts on “Fill the Money Pit Wisely”

  1. i would like to see the $ 90,000 garage .i can build you a small 2 bedroom home on your property for around 110k.
    most average 2 car garages are around 25 to 35 k .
    it is very true that investing in upgrades just to resell are not especially feezable with todays market .BUT it is a good investmant for the future when the market bounces back .
    i work in the builing trades ,so i know what it costs in general for updates to an average home .
    you can buy a deisel generator for around $4000 installed !
    $15,000 is a way high estimate as well.
    some of the avove estimates are a little high for the average home

  2. good point. these articles seem to use the highest numbers just to grab your attention. but i think the larger point is that any investment where you make back only half might not be the wisest. thanks for the comment!

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