With the real estate market and home prices stagnating making money on your home remodeling investment has become more difficult. You can come out ahead with your home remodel, but you need to ask the right questions.

Is this a desirable location? Location, Location, Location. Never has this been more true. The best situation to be in is to remodel the worst home in the best neighborhood. How do you know if this is you? Most likely you’re the homeowner in the older part of town that’s close to the best schools and amenities.

What improvements will I make? Not only must you think about the upgrades you want to put into your home, but you must also make sure the improvements are in line with the rest of the homes in your neighborhood. Yes, you may want to live in the best home in your neighborhood, but remember that buyers in a soft market will not pay what you feel your home is worth if the neighborhood is not of equal value to your home. Buyers will not pay $200,000 for your home if the rest of the homes in the neighborhood are only worth $75,000.

What’s this going to cost me? Two ways you can figure out the cost of your remodel. The first is to price out every single item yourself. But this can quickly become very time consuming. The second choice is to receive estimates from a contractor or two or three. This is especially beneficial if you’re unsure if you can complete all parts of the project yourself.

What’s the bottom line? You know what you want, you know how much it will cost, now you need to know what your homes value will be AFTER you’ve completed the project. The easiest way is to hire an appraiser to give you an assessment of what your house will be worth when you’re done. If your return on investment is not greater than 100% you’ll want to go back to the drawing board, especially if you’re going to be selling soon.

Why is this important to me? Your ultimate goal when selling is to have your home appeal to the greatest number of buyers possible. By answering these questions you’re putting yourself in the best possible position to make a profit from your home selling experience.

And isn’t that the ultimate goal?

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