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Top Tips for Investing in Your Home Despite the Recession

Top Tips for Investing in Your Home Despite the Recession

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January 28, 2009

by Karl Fendelander

Recessions often serve as a cautionary tale. Poor decisions have more serious repercussions during an economic downturn. Remodeling your home, though, let's you spend wisely and even save money. By focusing on energy efficiency, your next remodeling project can do more than just spruce things up. Avoid pitfalls and take advantage of recession windfalls with a home remodeling project.

The Sunny Side: Smart Home Investments

It may not be the best time to install a pool in the backyard, but by focusing on energy efficiency and other longer-term investments, you might cash in. Consider these great remodeling projects:

  • Room with a View: Replacing your old, drafty windows saves you money on energy. If the job is done properly, new windows can last for decades without servicing.
    • Energy Star: The Department of Energy and the Environmental Protection Agency teamed up to come up with this rating system. Look for their logo on windows.
    • Cost/Benefit: New windows can be pricey, but upon resale, homeowners see an average of 80 percent return for this investment. They save money on heating and cooling in the meantime, too. There's even a ten-percent (up to $200) tax break available from the government.
  • On Your Siding: Another energy efficient project that can save you money, new siding, adds a new look and a protective shell to your home. With many siding options you never need to repaint, and lifetime warrantees abound.
    • R-Value: This handy little number tells you how thermally efficient your new siding is. Typically ranging from one to three, R-values can go all the way up to 4.8 for siding.
    • Cost/Benefit: With an average 83 percent return, adding new siding is a smart investment. Energy efficiency isn't cheap, though. New siding typically costs homeowners around $10K.
  • Insulate Yourself: This project may not come with the flair of new windows or siding, but it does save money and energy. It's inexpensive, to boot.
    • R-Value: Compared to new siding, new insulation has amazingly high R-value (up to R60).
    • Cost/Benefit: Price varies considerably (from laughably inexpensive to should've-saved-up) depending on how much you need and what R-value you choose. There are tax breaks available to the tune of ten percent, up to $500. Save money on heating and cooling inexpensively with this project.

How Not to Invest

Some contractors may be short on work during this recession. This means that you may be able to save money on remodeling. It also means that some deals may be too good to be true. Invest in your home wisely by keeping an eye out for these:

  • Door-to-Don't: Door-to-door solicitors aren't always licensed. A tempting offer may turn out to be a disaster. Be sure to get license numbers, so you don't end up paying a do-it-yourselfer to use your home as a learning experience.
  • Under the Table: Be wary of cash-only transactions. If anything goes south, the lack of a paper trail leaves you without recourse. Under-the-table work only seems like a good idea.
  • Contractors Make Contracts: Get a contract, a complete one. This is your home and your remodeling project; you need to be sure your project plans are clearly understood. A quote may change, but an agreed upon price should come with a guarantee.
  • The Reference Section: References are the best way to see if a contractor is worth dealing with. Whenever possible, speak with former clients and check out previous work by the contractor yourself.   

The Other Half

While home remodeling projects that improve energy efficiency are going to give you the highest return on investment, that doesn't mean that you shouldn't consider adding a little flair to other parts of your home. Just be sure to do your research. Trim the fat from a remodeling project by asking:

• Can I do this myself?
• Do I need the absolute best, or is there a less expensive way to go?
• Am I getting the best value for my money?

Energy Star, Federal Tax Credits for Energy Efficiency
Energy Star, Recommended Levels of Insulation
Examiner.com, Recession not stopping homeowners from remodeling, by Michele Lerner
MSN Real Estate, 5 recessionproof remodeling projects, by Marilyn Lewis

About the Author: Karl Fendelander is a freelance writer and editor living in Reno, NV. He holds a degree in writing, which complements an eclectic work and education history. A lover of the outdoors, Karl can often be found hiking and climbing around the West.

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