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Remodeling
Projects:
Which
Ones Build Your Home Equity Most?
(ARA) - Can't
bear another day with pea green countertops? Does your rust-colored carpet
make you cringe? If your home's interior looks like the set of
"Three's Company," or if you're just ready for a change, now may
be the perfect time to renovate. The right remodeling project can enhance
the livability and value of your home, but which ones will give you the
most bang for your buck?
The Eyes of
the Beholder
Although your
personal tastes should factor into the project you choose, you also may
also want to take into account what a possible buyer might like. Don't
worry, mind-reading isn't necessary. According to Remodeling Online's
2000-2001 Cost vs. Value Report, kitchen and bath remodels, along with
second-story, bathroom and family room additions, recoup most of your
costs when a home is sold.
Other
improvements you might consider include:
- Energy
efficiency - With energy bills going sky-high, a new furnace that updates
your home's energy efficiency can lower your energy bills, as well as
appeal to buyers. Consider a new heating and cooling system, new windows
or added insulation.
- Landscaping
- Shrubs, rock gardens and retaining walls can enhance the beauty of your
home's exterior and increase curb appeal when it's time to sell. Properly
placed trees can block wind and lower heating costs.
Visiting model
homes is another good way to predict what amenities future buyers might
appreciate and find ideas that you might appreciate. Tour open houses
around your neighborhood, too. Besides getting free cookies, you'll get a
chance to see how your home compares with others that a potential buyer
might visit.
Hammer Time
So you've
decided on a project, now where to begin? If your project is complicated,
you will probably want to start by hiring a contractor. The Better
Business Bureau recommends getting bids from at least two or three
contractors using the same specifications. Ask for local references and
try to visit one of their completed projects. Verify that the contractor
has insurance to cover worker's compensation, property damage and personal
liability in case of accidents. Also, make sure the contractor is bonded
and licensed if your city requires it.
Financing Your
Fix Up
A strong
housing market has made it easier to finance home improvements. Rising
home values can mean increased home equity for people who have owned their
homes for several years. Equity is the difference between what your home
is worth and how much you owe on your mortgage and any other liens on the
home. Home equity loans let you borrow against that value for a variety of
uses, including home improvement projects.
Home equity
loans are available at fixed rates with average terms up to 15 years.
These loans usually have lower interest rates than credit cards, which may
mean lower payments and more savings for you. Best of all, the interest on
home equity loans may be tax deductible. (Be sure to talk to your tax
advisor.)
A home equity
line of credit may be a good option if you won't be doing all your
renovations at one time. With a line of credit, you are given a credit
limit that you can borrow against as you need it. Rates are usually
adjustable with flexible repayment terms.
Now that
interest rates are down, it may be a smart time to think about remodeling.
Home improvements may make your home more comfortable, energy-efficient
and increase its value.
Jim Larranaga
is Executive Vice President of Priority Publications, a Minneapolis-based
publisher of financial newsletters.
Courtesy of
ARA Content, www.aracontent.com, e-mail:
info@aracontent.com
Click on the link below to APPLY TODAY without obligation and
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