Lately we've been inundated by doom-and-gloom news in the media about the real estate market. But if you're planning to stay in your home and remodel or upgrade a rental for future resale, there is actually some good news to report: it's becoming less expensive to remodel as the market slows down and the law of supply and demand kicks in.
A year or so ago, the market was on fire and building materials and labor were scarce and expensive since the demand for both was equally hot. Construction material was in short supply, if you could find it at all, and finding skilled craftsmen for your project was an exercise in frustration. That situation was made even more difficult by the demand for rebuilding areas of the country that had been hit by Hurricane Katrina. On top of that, delivery costs also rose, due to a spike in gas prices. All of those factors contributed to cost increases of as much as 50 percent in certain areas.
The good news about all that? With the slow-down in the real estate market, materials are more readily available and construction people are actually looking for work to fill their schedules. Gas prices came down briefly, though they've begun to rise again, but the other pressures have lessened, which means that the cost of many common remodeling projects has decreased by 20% or more.
That's especially good news if your project is relatively small. During the height of the real estate boom, many contractors turned down smaller projects or told home owners to wait until they could get to them. However, many contractors are now actively trying to drum up work as the market continues to soften.
The downside of remodeling with an eye toward increasing your property's value is that, at least for the near term, your upgrade probably won't immediately pay for itself like it would have in the last few years. Since real estate prices have declined significantly in many parts of America, your remodeling project won't do much from an investment standpoint as it used to. Recent surveys have suggested that even the most popular upgrades, bathroom and kitchen remodels, are only returning about 80% of their cost.
The bottom line: this may be a good time to schedule that major remodeling project you've been wanting, assuming you're not doing it to quickly turn around and use the upgrade to increase your profits. If you do want to sell for top dollar in a buyer's market, you can increase your profits by turning your home into a buyer's dream home using less expensive faux paint techniques.
Whether you want to remodel or just decorate your home, you can benefit from exploring Flip That House with FAUX. See the controversial home that was on Flip That House at http://flipthathousewithfaux.com/book.html Enjoy your home!
Copyright 2007 Jeanette Fisher
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