Fancy Renovations Vs Mid Range Renovations
Does fancy renovation increase the value of your property?
Well, Not Really..!!!
Most of us have an idea that high-end remodeling will boost the value of our homes. Making things fancy increases their value, right? The truth is high-end improvements return less on their investment than mid-range remodeling. Why? Because of the law of diminishing returns: at a certain point your investment returns less. While upscale remodeling is about style and aesthetic, mid-range options tend to be more functional. And functionality sells.
Often when prospective buyers view a property the first question they ask is “does it have all the essentials?”Therefore, a pragmatically remodeled house is more marketable than one with luxury facilities. Consider a bathroom that’s in terrible shape, the mirror is cracked; the sink drips and the toilet won’t flush. A mid-range renovation would significantly increase the desirability of the space by making it more usable. But going the whole nine yards with the renovation wouldn’t change the functionality of the space and therefore wouldn’t make it much more valuable. So, basic renovations are better investment than luxury ones.
Before you decide remember that the value of your renovations will decrease over time. For instance, some facilities decrease in value as technical progress is made or as new things come into style. If you do decide to remodel you should factor in the value lost to depreciation. Say, for example, you do a total remodel of your home and it increases the property value by 1, 53, 00, 000. In one year’s time that increase would drop to only 1, 39, 00, 000 meaning that your investment has depreciated by 14, 00, 000 in just one year! So the next time you remodel make sure to go with the mid-range option to ensure the maximum return from your investment.