Investing in Your Home Improvement

By Bob Formisano

So everyone wonders, "Is it worth the money to remodel my home?" Overall the answer is "Probably." The reason home improvement and remodeling is a $230 billion industry is because people are finding value in home improvement projects.

However, you should not expect to fully recover the amount of the remodeling investment right away. Typically you can expect between 80% and 90% back on your home improvement investment dollar, sometimes more, sometimes less, within the first year or two. With the proper remodel, you can increase and even make money on the improvement the longer you stay in the home. As with many investments it’s the quiet power of compounding that creates good returns. By being in the home a longer period of time, you give the real estate market time to increase and you leverage the remodeling investment as property values grow.

At a personal level, you should consider three things when deciding if a home improvement project is a good investment or not: How your project impacts your home's appraised value; How long you plan to be in the home; How strong the resale market is in your area.