Nuts And Bolts Of Remodeling

Evaluate your landscape, noting where existing trees, shrubs and vines will fall in your design. Also consider other physical characteristics, such as which areas are shaded or sunny, locations with poor drainage, and even what angles offer the best view of your future garden.

Remodeling can also increase the resale value of your home. You may want to consider how much of the expense you're likely to recoup as one factor in your decision to remodel.

Remodeling magazine's annual "Cost vs. Value Report" ranks returns on common remodeling projects throughout the country. Prices for the projects and the amount recouped when the house is sold can vary dramatically depending on your local real estate market. The five projects listed here are ranked by the national averages, based on selling the home one year after completing the project. After a year, the improvements depreciate.

Minor kitchen remodel: In a functional but dated 200-square-foot kitchen, refinish cabinets and install new wall oven and cooktop, countertops, sink, flooring and wall covering. Average cost: $14,773. Average amount recouped: 87 percent.

Bath remodel: Update a 5- by 9-foot bathroom more than 25 years old with new tub, toilet, vanity with double sink, medicine cabinet, ceramic tile floor and walls in tub/shower area. Average cost: $9,786. Average amount recouped: 80 percent.

Major kitchen remodel: Update an outmoded 200-square-foot kitchen with new cabinets, countertops, flooring, wall covering and 3- by 5-foot center island. Replace all major appliances. Average cost: $38,769. Average amount recouped: 80 percent.

Family room addition: Add a 16- by 25-foot room on a new crawlspace foundation, tied into existing heating and cooling. Average cost: $46,739. Average amount recouped: 78 percent.

Deck addition: Add a 16- by 20-foot wooden deck with bench, railings and planter. Average cost: $5,865. Average amount recouped: 75 percent.

Paying the Bill

When you remodel, the choices aren't limited to colors, materials and dimensions. There are financing options, too. A home equity loan or line of credit lets you tap the equity you've built in your home. Equity is the value of your home minus your outstanding mortgage balance and any other liens. For most people, the interest paid is tax-deductible, but check with your tax adviser about your situation.

With a home equity loan, you get a lump sum and pay it back over a set period. A home equity line of credit allows you to borrow any amount up to your credit limit (although a minimum may be enforced) and pay interest only on the amount you borrow. As you repay the balance, it becomes available again.

Another way to use your equity is with a cash-out refinance of your home. You take out a new, larger mortgage, pay off the old one, and use the remaining cash to pay your contractor.

Although remodeling can be stressful -- and expensive -- you may find that, in the end, the extra enjoyment you get from your home makes it all worthwhile.

Courtesy of ARA Content