Home Improvements that
Pay Off
One of the smartest things you can do with your home's equity is to put it right back into your home. It's a clear win-win: You enjoy the benefit of an improved living environment and tangibly enhance your home's value at the same time.
But not every project will increase the resale value of your home. It's best to stick with the ones that will give you the biggest return.
Here's how Remodeling Magazine rates top jobs in terms of one-year return on investment (ROI):
| Project | ROI | Average Price Tag |
|---|---|---|
| Minor Kitchen remodel | 88% | $8,655 |
| Second-story addition | 83% | $73,553 |
| Bathroom remodel | 81% | $9,135 |
| Bathroom addition | 81% | $13,918 |
| Family room addition | 75% | $30,960 |
| Major kitchen remodel | 71% | $31,090 |
| Deck | 55% | $8,022 |
Home Improvement Tips
Don't over improve. It's difficult to recover the investment in a home that is already more valuable than most others in the neighborhood.
Keep whimsy in check. Eclectic tastes likely won't appeal to mainstream homebuyers.
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Terms Used in this Refinance Article
Equity
The difference between the current market value of your home and the total debt obligations against the property. On a new home loan, the down payment represents the equity in the property.
Return on Investment (ROI)
Return on Investment, or ROI, is a ratio that compares the net benefits of a project, verses its total costs. In simpler terms, the amount of profit your home improvement costs versus the cost of the project.
