Today I'd like to focus on which factors to consider when choosing to remodel, something we at Legacy refer to as the "remodeling equation." In this morning's Pittsburgh Tribune Review there was an article about how spending a lot of money on high end bathroom fixtures generally will not pay off later when you go to sell your home. The article cites the fact that according to a real estate group's study, the percentage of these expenses that can later be recouped has fallen from 78% to 64% over the past year.
I have also read recently about new proposed energy efficiency tax rebates aimed towards homeowners which will use federally designed software to help streamline the energy audit process and assist homeowners in selecting the most effective energy upgrades to their home.
While I agree with the Tribune article's point about not being able to recover fully money that is invested in home upgrades and I certainly laud the goal of this new government program, I believe that its important to look at all of the factors which a person should weigh when considering home improvements.
First of all, it is important to determine what your purpose is when considering a given project. Very few home upgrades are only about energy efficiency or investment. Rather it is more likely that a variety of factors lead a person to a decision to invest their home. For example, new high efficiency replacement windows or a new front door will can clearly add to the energy efficiency of a home. However these products will also add to the resale value of the home. So while evaluating resale value or improved efficiency are worthwhile, they should be done in combination with each other to really see the benefit of the project.
Additionally, when installing new products in your home you may incur further savings by avoiding maintenance that may otherwise been needed on that existing part of your home. A great example of this would be the decision to purchase new siding for your home to replace old wood or aluminum siding. Installing new siding can be a great opportunity to add insulation to the walls of your home, thus improving its efficiency. Siding can also be a good return on your investment from the standpoint of the payback that it provides, in fact, the current Cost Versus Value report from Remodeling Magazine shows that in the Pittsburgh area a vinyl siding replacement will return over 80% of the investment in the form of added value to your home (fiber cement siding like Hardie Board does even better, returning nearly 87% of the investment). So clearly siding replacement looks like a good use of remodeling dollars. However once you add in the value of skipping painting and maintenance, many homeowners find that in fact they can realize a net gain through this type of investment. Something that is not clear when evaluating only the cost recouped or the energy efficiency gained.
One last thing worth consideration when weighting home improvements is the enjoyment and improved quality of life that can come with upgrading your home. This can come in many forms. It can be enjoying a deck as a place to spend time with family, the added living space of an addition, or something as simple as replacing windows so that they can be cleaned and opened more easily.
In most cases people's homes are their most important investment. By evaluating potential upgrades from the multiple perspectives of energy efficiency, return on investment, quality of life and long term maintenance, people are better able to make sound decisions about how best to improve their homes.