How to Remodel Your Home and Profit Too

            The pendulum has swung to the homeowner’s favor and now is great time to remodel.

            “Labor and materials prices have decreased, making projects more cost effective. Traffic is down for designers and show rooms and it is easier and cheaper to tap those resources,” says Matt Lederer, president of Mahogany Builders.

            But before you rush to call contractors, think about which projects will give you the best return on your investment, which will simply be for your pleasure and what mistakes to avoid.

            Determine whether to go for profit or pleasure

            As for where the big returns on your money are likely to come from, “The kitchen is king. I always tell my clients to put the most effort into their kitchens because it’s where people spend most of their time. If you’re selling your home, it’s the first place that potential buyers want to see,” says Matt Blashaw, of the DIY Network’s Deconstruction. “The rest of the house could be in just fair condition, but if the kitchen has a nice remodel to it, chances are they will be willing to look past the rest,” he adds.

            That said though, you don’t have to go crazy with granite and stainless steel. ” A new paint job, light fixtures, faucet, re-facing the cabinets and maybe even tilting your counter with granite rather than using full sheets will inject that value you seek without breaking the bank,” says Blashaw.

           Master bathrooms, master suites and outside spaces are others that will give you the best return on your investment.

           ”New kitchens and decks are among the most attractive offerings of a home. They are much more visible and emotional than a new roof, for instance,” says Lori Dolnick, a spokesperson who has represented brands in the home industry for more than a decade.

          An outside space offers a secondary living area, thus doubling your entertainment space. A luxurious master bath can give you the feeling of being in a spa.

           Simply put, says Steve Lazar, founder of Lazar Design/Build, “Projects that expand the size of your home. The more square footage you have, the more valuable your house is.”

          As for what might bring you pleasure, but not necessarily profits, include projects like adding a fireplace, building bookshelves, and adding skylights, says Janice Hanks, owner of Next Level Austin Home Decorating and Design Consulting.

            Avoid costly mistakes

            No doubt though, there are many, many things that can go wrong when it comes to remodeling.

            One of the biggest mistakes people make is not hiring a professional remodeler. The best professionals are trained and educated, have a good reputation with the Better Business Bureau, belong to a professional trade association and can provide good references, says Kelly Mack, spokesperson for the National Association of Home Builders which has a remodeling website with tips on planning a successful remodel, www.nahb.org/remodel. Check references and on-line reviews. “You will be living with a construction crew for weeks, if not months. Do your homework and choose wisely,” says Lederer.

            Another faux pas is trying to try to mix apples and oranges. The new addition must blend with the existing house or it looks like you are living in two homes. It is easiest to stay within the footprint of the house – if you need new space, go up and keep the style of the home consistent. “Whether you build up or out, the existing and remodeled portions need to main integrity, or the new will look like an appendage,” warns Lazar.

            Make sure that you understand what is included in the contract and what is expected of you. “Too many times a homeowner hires a contractor then realizes they are expected to source and get all the materials for the jobsite. They also learn the hard way that the contract allows for change orders and extra charges for unforeseen issues,” says Lederer.

            Do not underestimate how hard the process will be on you and your lifestyle while your house is being remodeled, adds Scott McCurdy, owner of Coastal Reconstruction.

            While you want to be budget conscious, buying price not quality, and hiring by price, not quality can be serious missteps, says Igor Crook, owner of Eco Kitchens.

            Prepare yourself financially

            There’s big money involved in this. Look at your entire financial picture. “If you have several large recurring expenses that you just can’t minimize, it might be a good sign that you don’t have the financial bandwidth to take on a new project right now,” says Melanie Donaghy, vice president of Wells Fargo Internet Services.

            Get multiple estimates. This will give you a good idea of what to expect, but it’s a good rule of thumb to multiply the expected cost by a factor of 1.5 to cover changes, contingencies and Murphy’s Law, she add. The unexpected almost always occurs, so just go ahead and plan for it, says Donaghy.

            Once you have a clue about costs, cut back on everyday spending and start saving. See how much you can really save each month and calculate how long it would take you to reach your goal. “If you could save for six months and pay the entire cost upfront, you could save hundreds of dollars by avoiding the interest accrual related to purchasing on credit,” says Donaghy.

            Remember, says Hanks, “The goal is to get the most bang for your buck. Balance wants and needs. Stay on budget.”