Top Tips for Investing in Your Home Despite the Recession
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?
Sources:
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.
