Owners should choose home improvements that will add value

Many homeowners have lofty goals for their homes. Such plans may include extensive renovations or even additions. While many of these projects can create beautiful upgrades 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 to a property’s resale 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’s value simply exceeds those around it by too much money.

To avoid overbuilding, homeowners should ask themselves the following questions before beginning a renovation or upgrade project.

Will my house be the largest one 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 other homes in the area?

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

Have I examined the cost-versus-value factor 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 your investment.