What is the most common misconception about the value of home improvement? That your investment translates dollar for dollar into added value. When investing in remodeling – from small updates to major renovations, take a good look at the real impact of the project on your home’s value.

The state of the market, the homes in your neighborhood (‘comps’), how long you hold on to your home and the kind of improvement all play a role in determining what you will recoup out of the initial investment. Sometimes remodeling pays of and sometimes it does absolutely nothing to increase your home appraisal.

Here are some of the home improvement winners:

  1. Kitchens: Updates to cabinets, appliances or flooring can really make a difference in both the appeal and actual value of your home. Kitchen makeovers rate an A+ for adding value.
  2. Additions:  These are great as long as the addition doesn’t take your home out of the neighborhood comps, well thought out square footage adds a value approximate to the investment you put into it.
  3. Extra bathroom:  An extra full bath, well done can come close to paying for itself, but gets only a percentage back of the actual cost.
  4. Decks: A great way to add square footage cheaply and create outdoor living space, which is a hot trend right now.
  5. Windows: As long as the windows are a standard size and you make the extra effort to get double pane, energy rated glass and trim, you will save money on utility costs while waiting to sell and they will make the home more appealing.

One home improvement that likely won't bring a return on investment is a swimming pool. Only put one in if you love to swim and plan to use it, don't install one on the assumption you will get your money returned. In some markets such as warmer clients a pool may be expected, in others it can be a wow factor if well done, but pools add no resale value to your home and may even be considered a liability.

A good piece of advise is to keep your home well maintained, make sure all the basics are take care of before you add any new features.

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