Make sure renovations have positive effect on home’s value

Many homeowners have lofty goals for their homes. Such plans may include extensive renovations or even additions.

While many renovation projects create beautiful changes in a home, before beginning a project, it’s important to consider the impact that renovations can have on property value.

Many home-improvement projects do not add as much value as homeowners may think they do.

In fact, some homeowners “overbuild” for their neighborhoods. This means the amount of money invested in improvements can likely never be recuperated because the house value simply exceeds those around by too much money.

To avoid overbuilding, homeowners can ask themselves several questions before beginning a renovation project.

• Will my house be the largest house in the neighborhood?

Larger homes tend to have a lower price per square foot, so you may not want to improve to this extent.

• Will the house blend with others in the area?

If your house will stick out like a sore thumb, it will detract from its own value and could impact the value of other homes in the area.

• Have I examined the cost-versus-value factors of the project?

Many home-improvement resources analyze the cost of a project versus the overall value of that project with regard to property value. For example, a $100,000 basement remodel may not add $100,000 to the value of the home in the event that you choose to sell down the line. It’s important to know which projects provide the best return on investment.