Dan Krewson
CCB#128460
11192 SE 52nd Ct.

Milwaukie, Oregon
503-312-1963
503-353-7745
 


 
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Remodeling Upgrade: The Frame Work Supporting it...

Most people remodel because they want to make their home more comfortable, attractive or functional. But there's another good reason to remodel. Improving your home can increase its value. And for most people, their home is their greatest asset.

Trade magazine Remodeling and the National Association of Realtors annually co-publish a cost vs. value study which documents the immediate resale value added to a home by the most popular remodeling projects. The figures are gratifying for anyone who has shelled out a significant amount of money on home improvements and encouraging for someone who might want to do the same thing


Remodeling can be money in the bank...

Here are some national averages for the value of popular remodeling projects:
  • Minor kitchen remodel: 81 percent
  • Bathroom addition using existing space: 72 percent
  • Family room addition: 71 percent
  • Master suite: 68 percent
  • Two-story addition: 62 percent
  • Deck addition: 54 percent


If you have seen this study before and think these numbers are lower than you remember, you are correct. Previously the study's methodology wasn't very scientific. It focused on the opinions of real estate professionals in 60 housing markets around the country - some of whom were in the business of selling homes for rehabilitation. Last year, in response to criticism, the Realtors added appraisers to the group of estimators. While this presumably improved the quality of the estimates, it also lowered the return-on-investment values since appraisers tend by their job description to be conservative.

So while the numbers may not look quite so promising as they have previously, the news may actually be better for homeowners since it is probably closer to the truth.


Choose the right project...

According to Remodeling, there are several significant points that anyone might take to heart when they consider a project.

Minor kitchen remodeling - which includes nothing fancier than paint, vinyl flooring, new appliances, new laminate countertops and refacing the cabinets - is a can't-miss project. Remodeling estimated the cost nationally of doing this to a 200 square foot dated but otherwise functional kitchen with 30 lineal feet of cabinets and countertops to cost $8,635. If the homeowner turned around and resold the house within a year, she will get back $7,041, or 81 percent of the money that she spent. That's impressive.

The figures are almost as good for adding a bath. In a house that has fewer than two full baths - maybe just a bath and a lavatory - the addition of a 6-foot-by-8-foot bath in existing space will cost $13,918 on average nationally. A seller will recoup $10,000 or 72 percent of that within a year. In some cities where the housing stock is old and the market is hot, the numbers are far better.

There are a couple of caveats. To be that valuable, a bath must be convenient to bedrooms and include a standard bathtub with a shower. Experts say anything less will have diminished value.

Another relatively small-dollar project with healthy repayment is the addition of a home office. To take a den or fourth, small bedroom and build in cabinetry, electrical and phone connections to allow someone to do business at home costs about $8,356. But nationally it has a surprising 50 percent return on investment. That number jumps to more than 100 percent in areas like San Francisco and suburban New York/New Jersey, where telecommuting and self-employment are more popular.

Less sexy home projects also have a good return on investment. New windows cost on average nationally $7,531. That investment would return 56 percent, or $4,226. Regional differences are especially strong in this category. In the East, with its older homes and cold winter weather, the return averages 61 percent. In the South, where the weather is milder and many of the homes newer, homeowners recoup only 48 percent.

Another project that returns well in the East, but doesn't do so well in warmer parts of the country is replacement siding. Recovering a house with vinyl siding - the most popular variety - costs $6,072 in the East and returns 70 percent within the first year. The number falls to 48 percent in the West, where stucco is the preferred material.


First rule: do the job well...

One of the things that Realtors and Remodeling magazine emphasize is the importance of doing the job well. No project is worth very much if it is badly conceived and poorly executed.

The National Association of the Remodeling Industry says these are the top 10 mistakes homeowners make when they undertake a remodeling project.
  1. Hire the wrong contractor. Make sure that the contractor you hire will be skillful, work hard, stay within his budget and finish the job promptly.
  2. Poor planning. Planning is not the place to scrimp. Use an architect, a design-build contractor or a designer who will listen to what you want, provide excellent suggestions and help you follow through.
  3. Making ill-informed decisions. Contractors say the best customer is an informed one. Start with the basic information and then learn all you can about the project you propose to undertake.
  4. Going cheap on materials. You may be tempted to save a few bucks by buying things that are good enough. But you'll have to live with your mistakes, so buy materials that are built to last.
  5. Doing it yourself. Contractors hate to pick up the pieces from failed projects. Most homeowners don't have the skill to do a job professionally.
  6. Timing it badly. Hiring someone to remodel the family room days before Junior's high school graduation party will almost guarantee that the job will be done in a rush and some aspects of it will be neglected.
  7. Stacking the jobs. The kitchen remodel is going so well, that you also undertake a bathroom update and bring the heating contractor in to add air conditioning. Pretty soon chaos reigns. For sanity's sake, finish one project before you start the next.
  8. Making it too good for the neighborhood. If you already have the nicest house in the neighborhood, remodel frugally because few buyers will pay more for a house in a neighborhood where the average price is low - no matter how nice it is.
  9. Running out of money. If you can't pay your bills, the contractor will be understandably angry.
  10. Misunderstanding the agreement. Putting everything in writing may seem unnecessary and like a lot of work - after all you're dealing with a pro. But oral agreements - even those between well-meaning people - can go sour. Work with your contractor to develop a contract that includes everything you expect him to do, a payment schedule, a timetable, a list of products to be used and a mechanism for solving problems swiftly.

Tips for handling change...

Here are some other suggestions to make your remodeling job go smoothly.

Figure out how to deal with change. It's inevitable. The plumbing fixtures you wanted aren't available any longer and the wallpaper is out of stock. How do you deal with last-minute substitutions? If possible, look at the new item in the store. If not, look in the catalog, and be available to take a look when it arrives at your house. If you don't like the product, the best time to do something about it is before installation.

Devise a plan for dealing with unknowns. Even the smartest, most competent contractor doesn't know exactly what he'll find when he rips off the old siding or tears out the old plaster. Cost overruns irritate everybody. The best way to handle the problem is to agree in advance on areas of the job that are unknown and on a method of estimating the work involved and assigning it a financial value.

Some contractors cover these contingencies with an "allowance": a separate estimate within the overall job price. But other contractors prefer a "time and materials" approach. This means you agree on an hourly or daily rate for labor and pay for materials upon receipt for those portions of the job that are impossible to estimate. Either payment approach has drawbacks. But don't forget: put the new specifications in writing.


FAQs...

Which job returns the most on your investment?
Updating the kitchen has a very quick pay-off - 81 percent within the first year. And you don't even have to move walls and replace cabinets. A little paint, some new countertops and updated floor may be enough.

How do I make sure I get what I want from the contractor I hire?
Be straightforward about your requirements, and in return, listen closely to what the professional has to say. Before you ink the deal, get all the specifications, including payment arrangements and a timetable, in writing.



Ready, set, remodel...

While the contractor is going to do all the physical work, you don't get off scot-free. Here are six simple things you can do to make sure your remodeling project gets started on time and goes smoothly.
  • Clear the area around where the work is going to be done. You don't have to move heavy furniture - that's their job - but getting rid of the knick-knacks and the small stuff will ensure that nothing is lost or broken. It will get the real work started more quickly.
  • Identify an area to store new materials so they are accessible and ready for installation - and you won't be stumbling over them.
  • Make sure you know where the breaker or fuse box is, and how to turn off the main water line. If there is going to be any digging in this project, call the utility company and get the location of your underground gas and power lines. Put a little flag near them to help prevent damage.
  • Your contractor will take the construction debris with him when he goes, but may need a place to store it in the meantime. Choose a temporary site. If you are renting construction dumpster, decide where that is going to go.
  • If you're not going to be around while the work is done, give the contractor or his foreman your phone number, so you can be reached right away if needed.
  • Know where the contract is filed for a quick reference to resolve questions, or if you need to call the contractor after he has gone home.

 

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