Investing in real estate in the 2000’s became so vogue that “everyone” thought they should figure out away to get in on the action. Unsuspecting investors leveraged themselves into credit lines, loans and contract for deeds; to do flips and speculate on lots, commercial properties and model homes. Banks, credit unions, mortgage companies and now an infamous list of Wall Street heavy weights all got sucked into the frenzy. Very few came out of the resulting collapse unscathed, including the companies who pay staff high salaries to be able to predict and project future trends.
We are now all paying a price through a deep and long recession and higher unemployment than we have seen in 30 years. In times such as now, how should one view investing money into one’s home?
There are some common sense approaches to consider when deciding when, why, what to repair or remodel and how much to spend. I typically engage every one of my potential clients into this conversation very early in our discussion. People are more concerned than they were a few years ago about making smart decisions regarding their homes as they are on many fronts involving their finances.
Whether the economy is improving or waning there are some Remodeling Fundamentals to consider when evaluating your choices. First, you should establish a responsible budget and then consider these:
- Fix what’s broken or failing so that damage doesn’t get more expansive and expensive than it might have been.
- Think about projects that pay back overtime such as energy saving windows, siding or insulating projects.
- Concentrate on high return on investment projects such as kitchens, baths and new exteriors.
- If you do have an insurance claim, try to leverage those dollars in a way that not only repairs that damage but may also be a nice down payment on a project that will pay higher dividends in the future.