Wednesday, January 26, 2011

Top 5 reasons to invest in your Home

Whether you want to stay or move soon - the market is saying, go ahead and finish all those home improvement projects you have been procrastinating about.  

Assuming you like what you can't change about your home -- the neighborhood, the school district, the proximity to things that matter to you -- and you're planning on staying for five or more years, improving your home is an easy decision.  Here's why

1. Most importantly - you will enjoy it - do it for yourself rather than the next owner of your home.
2. Contractors are giving huge discounts, building materials have become cheaper - take advantage.
3. Funding is cheaper that it has been in decades.
4. You will cut energy costs - insulation, windows, appliances...
5. Smart projects do add value to your home - think kitchen, bathrooms, curb appeal. 

Remodeling magazine released their annual Cost vs Value report.  It compares costs with resale values for 35 midrange and upscale remodeling projects.  To view the data for Philadelphia click here.  Owners recouped an average of 87% of home improvement costs at resale in 2005, according to Remodeling magazine. But by 2010 the magazine had pegged the typical payback at just 60%.  To read Realtor Magazine's take on this year's report click here.

Home improvements aren't purely investment decisions - you shouldn't redo a kitchen or bathroom in the hopes of making a profit. But if you want to upgrade the quality of your home life and you can afford the cost, it's money well spent. 

However the gray area comes in when you are planning to sell or you don't know if you will be staying put for the next 5 years.

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