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Over-building when remodeling can be a costly
mistake to avoid. You've seen the houses that literally stand out in the
neighborhood for one reason or another. This may be because the owner lost
perspective and over-built when remodeling, effectively pricing the home out
of the range of the neighborhood.
If you are uncertain how long you will live in
your current home, the rule of thumb is to stay within 10-15 percent of your
neighborhood's price swing. When you exceed the 10-15 percent range, you
jeopardize the investment in remodeling and it is unlikely you will recoup the
investment.
For many, the decision about whether to remodel or
sell their current home can be complicated. As part of the decision making
process, it is important to look at both emotional and financial aspects of a
change. Remodeling to turn your current home into your dream home may seem
like a good idea, but could out to be a poor investment strategy. To avoid
costly mistakes you must determine whether or not you will be able to recover
your investment in home improvements when you sell.
It may not make sense to invest in improvements to
your present home rather than start fresh with a new home that already meets
your needs. Focus on this as a business decision and use your head. Few
remodeling projects or additions will return full value should you choose to
sell. If you over-improve, the market will not bear the cost and you risk
losing cost with value. Sink major dollars only into a lifestyle choice, not
for a positive return on your home investment.
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