Q&A 6 – What Is The ROI On A Remodel
Alex Schenkar again with another great question from one of our Instagram viewers. Alex, what is the general ROI, return on investment that I get from doing a remodel? It’s a great question, it’s something to think about, we’ve been over this for many, many years, and it’s a very common question. The objective ROI or return on investment for a remodel is very important. What is the value in which that you’re spending in order to get a return in true equity in the property? Very common rule of thumb, I like the question, here’s the answer. It’s very, very objective. It’s important to take a look at the value of your home versus the mortgage that you owe versus what is the proposed amount of budget that you’d like to put together for a remodel. There’s a pretty easy equation there, it’s easy to do the math, it’s something to take a look at and think about because you don’t want to overextend yourself. You want to maintain a certain objective ROI within your investment so that you get long term growth and equity in the property.
The second portion is subjectivity. What is the true livability in return on investment? That’s not as equally answered in a mathematical equation. I like to think of it as what do your family gets to enjoy over the next 10, 20, 30 years. That doesn’t really have a monetary value on it that has a more subjective livability value? What is that kitchen worth to you? What is that bathroom worth you? What is that increased square footage in living space mean to you long term? That can’t really be calculated, but it’s something that I think people should really think about. And I encourage our clients to take a look at that because it can’t just be about dollars and cents. It has to be about what are you really getting back for your lifestyle over the course of the life of the home.