Investing in Your Home: Will I see a return on my investment?
September 9, 2009 by admin · Leave a Comment
With the housing market in a record slump, one of the biggest questions I get from people is how much is too much to spend on a renovation and will I see that money back when I go to sell my house?
While it is a common belief that any money you put into your house will add value to it, this is not always the case. There are really two different reasons that people invest money into their home- General Maintenance/Upkeep and Visual Improvements.
1) General Maintenance- Projects like replacing your hot water heater, patching a leaky roof, repairing damaged siding, or sealing up cracks in the foundation are not going to show you a return on your investment but they are going to be required to keep up the overall condition of your home.
Regular maintenance can help extend the life of your home but at some point there are things that are going to be replaced. By avoiding repairs or maintenance on items like this will just make the condition worse and will result in even more money being needed for repairs
2) Visual Improvements- While that sounds very vague, this would be anything that is not structural in nature or not necessarily required. This is where investing money into your house is going to pay off. Projects like renovating a bathroom or a kitchen, finishing off a basement, adding a deck, or even landscaping the yard will not only spruce up your home but they will also add value
That being said, not all of these projects will yield the same return. For the same amount of money, finishing off a basement might yield a 20% return on your investment while renovating your kitchen or bathroom could yield a 75-90% return on your investment.
Even though the rule thumb says that you will see a return on your investment by renovating a kitchen or bathroom, or by finishing off a basement, that is not always the case. If you are planning on selling your home in the immediate future or down the road, putting too many personal touches on a space can actually have a negative affect.
The same thing can be said for spending too much on a given space. If the average kitchen in your neighbor is estimated at $25,000 in value and you spend $60,000 on your kitchen, odds are you will have a hard time convincing buyers that the house is worth that much more than your neighbors.
Adding additional bedrooms or an extra bathroom is always a good investment provided it is not taking space away from other usable space. Be careful when taking usable space to create two spaces. Sometimes taking a bedroom and cutting it in half will actually take value away from the house if it wasn?t big enough to start with. It is always a good idea to have a real estate agent give you some advice as to the impact a renovation will have on the value of your home.
By investing wisely, you can see some significant returns on your investment, whether it is a more comfortable living space for years to come or a more attractive home for potential homebuyers.
Austin is Forbes Magazine’s #1!
September 8, 2009 by admin · Leave a Comment
Why isn’t Forbes magazine moving it’s business to Austin? Forbes says its #1 in America! It’s got beautiful scenery, great recreational choices, a healthy realty market and a slick city attitude. And, as if anyone needed confirmation, Forbes magazine has now ranked Austin in the top three of each of its three ‘best in America’ categories.
Forbes magazine is considered by many to be America’s #1 magazine for business, stocks, finance, lifestyle, technology and much more. When they compiled their 2008 rankings of ‘Best Places for Business and Careers’ this year, they slightly expanded their criteria to include certain other qualities of each area analyzed.
This is where Austin scored and all the facets of the survey contributed to Austin being the # 1of all America, in this category. When taking all aspects into account, income and job growth were still ranked first, but the analysis was expanded to include the whole business atmosphere.
Forbes reportedly gave special attention to the cost of doing business in the cities analyzed. This included the price of office space, labor, taxes and energy. The analysis not only explored the realizable pool of labor, but also investigated the quality and qualifications of the available pool of labor.
The rankings also calculated social characteristics which would make the region more attractive, such as crime rates, housing costs and net migration.
Austin came up as number one! Of course, in Austin this is no surprise, but it is still a feather in the cap to be recognized as the number one nationwide in the revered Forbes magazine.
One of the many reasons given for this ranking is attributed to the University of Texas. Each year the University enrolls close to 50,000 students and 25% of these enroll in graduate and professional degree programs. This results in the available labor pool being supplied with top notch college grads, many with Ph.D. s.
The other two surveys, in which Austin came in second and third would also have helped to contribute to the number one ranking in ‘Best Places For Business and Careers’.
Austin came in at #2 for job growth and at #3 in the ‘Best Cities for Jobs’ ratings. Austin ranks third in the country for net migration; the figures for migration into Austin are quoted as 2.7% per year.
All these factors also contribute to elevating the allure of the Austin housing market, which is named as one of the few in the country predicted to rise in the next two years.
This was reported in a survey compiled by Private Mortgage Insurers, which dammed many areas into an 80% chance of realty decline, whilst analyzing Austin as having less than a one per cent chance.
All these indicators point to Austin as being amongst the best places to live and work in the United States; looks like the secret is out!