Most homeowners remodel within 18 months of purchase, reports the National Association of the Remodeling Industry.
Relatively few homeowners do the work themselves: Professionals do 78 percent of remodeling projects compared to 18 percent do-it- yourselfers. Another 4 percent are buy-it-yourselfers.
The top six remodeling projects, according to the NARI, are (some homeowners do more than one at a time, so these percentages do not add up to 100 percent):
- Kitchens, 47 percent.
- Baths, 46 percent.
- Other interior work, 41 percent.
- Room additions, 35 percent.
- Sunrooms, 32 percent.
The reasons people remodel are as varied as the projects undertaken.
According to the National Association of Home Builders, reasons for remodeling include:
- Adding more space.
- Upgrading cabinets, appliances and fixtures.
- Creating a floor plan for your lifestyle.
- Improving energy efficiency.
- Increasing the resale value of your home.
But remodeling can be an expensive proposition, both in terms of time and money. Before you tear up those walls, consider what changes you'd really like to make, what your budget constraints are and how well you can live with the upheaval if you remain in your home during construction.
According to the American Homeowner Foundation, selling your home and moving (including moving costs, closing costs and broker commissions) typically costs between 8 percent and 10 percent of the value of your current home. You might consider that sum when deciding if remodeling your home will pay.
Return on Investment
While one survey says that a $10,000 kitchen remodel returns 45 percent of its value in Hartford, Conn., the same renovation returns a hefty 125 percent in New Haven. These survey results may be downright suspect, say some professionals, who advise to look at basic factors to determine your return on remodeling investment.
Consider neighborhood norms, says the American Homeowners Association. For example, if your home has only one bathroom while most homes have two or more, it might make sense to install an additional one, or even a half-bath.
Expensive isn't always better, says the AHA. Sometimes, the cheapest renovations offer the highest returns. Exterior paint and landscaping improvements can add considerable "curb appeal," while basement rec rooms or swimming pools tend to be losers.
What's the demand? If homes in your area are selling fast, chances are people will pay for your remodeling. Get your neighbors' opinions. A new paint job typically is the most bankable fix-up, says Smart Money magazine.
According to the National Association of Realtors, a professional exterior paint job costs an average of $3,250 and recoups 81 percent of its cost.
Kitchen improvements can pay off, too. According to Smart Money, a recent survey shows the average kitchen major remodel costs $21,262 and nationally recoups 90 percent of its cost; a moderate refinishing averages $8,507 and recoups 94 percent.
An extra bathroom "all but pays for itself," says Smart Money. According to a Remodeling magazine survey, adding an extra bathroom with marble vanity top, molded sink, bathtub with shower and ceramic tile costs an average of $11,639 but recoups 89 percent of its cost.
Kitchen cabinets account for about half the total cost, while bathroom cabinets account for about 34 percent, according to the National Kitchen & Bath Association, so the choice you make can have a real budgetary impact. Counter and floor materials in the kitchen and fixtures in the bathroom tend to be the other biggest factors.
Converting an attic into a bedroom suite costs about $22,840 but returns about 84 percent of its cost at resale.
Installing a redwood deck may be one of the most cost-efficient ways to add space to your home: at an average cost of $6,000, decks generally recoup about 50 percent.
Once you've decided remodeling makes more sense than moving, where do you get the money?
Four of the most common methods are a home improvement loan, a home equity line of credit, a home equity loan (second mortgage) and a cash-out refinancing of your current mortgage, according to the NAHB.
If you have cash savings, that may be the best way to finance home improvement. But consider the interest rate you'd be charged by financing the project compared to the interest rate you could earn by investing those funds. Also, remember that interest payments on a home improvement loan are usually tax-deductible.
"Plan on spending only 80 percent of what you can afford," advises the NAHB. "Put the additional 20 percent in reserve to cover changes, unforeseen problems and miscellaneous charges."
The Time Factor
A kitchen remodel may take from 14 to 25 days, according to the NARI. Custom jobs can take months longer.
A simple bathroom remodel may take only a few weeks, while a two- story addition may take six months or more, according to the NAHB.
"The only one who can answer the question of how long it will take is your contractor," advises the NARI.
To stay on schedule, plan ahead, says the NAHB:
- Be sure to build time into the schedule for obtaining necessary permits.
- Ask your remodeler to provide you with a weekly schedule.
- Ask your remodeler which products require the longest lead times, and make those selections as early as possible.
- Realize that changes you make along the way may affect the schedule and budget.
Meanwhile, while you remain in your home during the construction, prepare for inconvenience and changes in your routine. Set up temporary cooking and cleaning quarters in another room or plan to grill outdoors a lot.
"Maintain a sense of humor," says the NAHB. "It's best to laugh rather than upset yourself about things like the weather or delayed delivery of materials."