A couple of years back, housing prices skyrocketed and interest rates hit rock bottom. Homeowners everywhere refinanced or took out home equity loans for remodels, pools, and decks. Backyards became outdoor living areas. Home Depots spawned Expo Design Centers and soon granite countertops were de rigueur. As conspicuous consumers we contented ourselves that these improvements were worth it because they increased the value of our homes.



But what kind of return did we get on our investments? The truth is that most home improvements cost more than they add to the value of your home. And no improvement is valuable if you can't sell your home. So before you run out willy-nilly remodeling this and that, ask yourself how soon you want to sell that house. Sometimes inexpensive home improvements are best for the short term.

What are homebuyers looking for? First and foremost buyers want a solid house in good repair. A newly renovated kitchen may be eye-catching, but if the roof leaks what good is it? At best the buyer will ask for the cost of the repairs to be deducted from the price of the home, so make sure all the basics are in tiptop shape. Your first investment should be in the roof, gutters, foundation, plumbing, electrical systems, and chimney. Plus, according to soundmoneytips.com, repairing plumbing and electrical problems has a 260% average return on investment.

Once you've taken care of the fundamentals, you can consider the eye candy. Again, sometimes the best investments cost the least. A freshly mowed and edged lawn costs nothing and will be inviting to buyers. Fresh paint looks neat and tidy on the exterior of your home and can brighten up dingy interiors. Always patch and repair any damage to the walls before painting. The average return on painting your home's interior is 148%.

What is the number one return on investment? Cleaning and de-cluttering your house. Try renting a storage space if you can't bear to part with your junk altogether. Buyers want to feel comfortable in your home?not creeped out by your dusty, cobweb covered light fixtures. The soundmoneytips rate for return on investment in cleaning and de-cluttering is 973%.

So what about the additional bath, the kitchen remodel, and the pool? These are home improvements you may want to consider if you are planning to stay in the home for a few years. While they still add value to your home, they cost more than the value they add. That's not to say they cost more than they are worth. Lifestyle can be a big factor in a home sale. People rarely say, ?It's almost perfect, but I just can't stand a house with a pool.? And while a pool only adds about 40% of its cost to the value of a home, you also have to consider if you and your family will be sticking around long enough to use it.

Kitchen remodels and bathroom additions fall into the same category. A major kitchen remodel with new cabinets, tile floors, and brand new appliances can run from $50,000-$100,000 for a modest single family home and it will only add about 75% of that cost to its value. An extra bathroom will run you about $60,000 and only recoup 70% of its cost.

But they look great to potential buyers, and besides, you get to enjoy them while you live there.

By: Christine Flanders

Edited By: Michael C. Podlesny