Increase Home Value and Profit through Home Renovation
The proper techniques in renovation are very crucial nowadays if you want to increase the value of your home. The slow economy should not discourage homeowners from home renovation in order to increase their home value. Practical homeowners should learn about value engineering with regards to home remodeling if they want to earn a profit from renovation. Just follow four easy steps below to increase your profit and at the same time increase your home value.
First, get in touch with your local real estate office or an eligible appraiser to get the current market value of your home and the value of the renovated homes which are similar to yours in your vicinity. It is important to obtain this information to guarantee that there is room for profit. If you discover that the value of home renovations close by is similar to the price of your un-renovated home, then it is useless to renovate your home.
Make certain that you will only compare your home with homes that are comparable to yours and are situated a short distance from your home. Since real estate prices differ from area to area, it is pointless to compare your home that is located in a different area.
Second, find out which home renovations in your area increase in value and which renovations do not through your local real estate office or an eligible appraiser. Find out the value of these renovations brings to your home.
A method utilized by real estate salespersons and appraisers to establish home value is the Comparable Market Analysis (CMA). Appraisers look at a large number of sold properties close to your home and then modify the price for your home based on the existing condition of your home as well as any new home additions or extensions that you may have constructed. A second bathroom in your area would show an increase of $4000 compared to those who did not have a second bathroom. The same goes when the appraiser notes that a finished basement can increase the home value by $6000 or a fireplace may have no impact or home value.
Third, you need to know your cost for the construction of these home renovations in order to determine if you are able to make a profit from a specific renovation. Acquire at least three price estimates from eligible contractors to find out the cost for each renovation.
Finally you can now determine which particular home renovation can increase your profit. Just subtract the added value of what each renovation brings as explained in the previous step from the cost of that renovation determined in the last step. This is most helpful when you have a tight budget and need to find out which renovation will give you an increase in profit.
