Blog this Boitch - Contractor Talk - Professional Construction and Remodeling Forum

oldfrt · 11-05-2009, 08:26 AM

Woke up to this today and it got me fired up:
http://articles.moneycentral.msn.com...-of-money.aspx

Maybe some of us should go over and give her a little creative insight.
I did!
Nopt too many positive responses in her blog.

XanadooLTD · 11-05-2009, 09:02 AM

I think she might mean in this time. I have seen 150k remodeling prjects on a house that is only worth 150k. That doesn't mean the house is worth 300 now. Neighbors house is a plain 2500sq ft house sitting next to this 4500sq ft house. I know before this tank it was the case but not now, and technically it was never meant to be that way. I remember a real estate class stated that any work below grade was not even considered living area could not be considered sq footage and definitely didn't add any value. Now people expect big returns on basement living. I think remodeling should be done to upgrade your living and not to expect a ROI. IMHO

bert0168 · 11-05-2009, 07:35 PM

Jackass.

oldfrt · 11-05-2009, 07:45 PM

Quote:

Originally Posted by XanadooLTD

I think she might mean in this time. I have seen 150k remodeling prjects on a house that is only worth 150k. That doesn't mean the house is worth 300 now. Neighbors house is a plain 2500sq ft house sitting next to this 4500sq ft house. I know before this tank it was the case but not now, and technically it was never meant to be that way. I remember a real estate class stated that any work below grade was not even considered living area could not be considered sq footage and definitely didn't add any value. Now people expect big returns on basement living. I think remodeling should be done to upgrade your living and not to expect a ROI. IMHO

It's all about personal fiscal responsibility.

That is what the article is about,so it should have been titled so.
Using sensational headlines,and making broad statements like:
With remodeling, you're all but guaranteed a loss
Even at the real-estate market's peak, most remodeling projects didn't pay for themselves
...only hurts an already struggling market.

She's wrong if she's talking about now for a few reasons:

Real estate is as low as it will probably go.
Money is cheaper today than it will be tomorrow.
There's more qualified Contractors available.Supply/demand,if Ho's do their homework and don't hire jack-legs.

I made thousands of dollars by buying in a low market,doing upgrades,and selling only five years later in a better market.
Again,it's about knowing what your doing and doing it responsibly.

Don't use headlines like:

Remodeling? It's a waste of money

and then go on to say:

Home-remodeling horror stories
Homeowners

typically recouped an average 86.6% of their costs, according to Remodeling magazine's 2005 Cost vs. Value report -- and that's only if homeowners sold within a year of finishing the work.

..without clarifying that more of the investment could have been realized and a maybe a profit made in say 5-10 years,in a better market.

Mike Finley · 11-05-2009, 07:46 PM

She is exactly correct.

Remodeling isn't an investment. As stated an investment makes money.

Remodeling is maintenance, that is all it is unless you are adding square footage.

If you're a kitchen or bath remodeler you know that all the updating for $20,000 or $100,000 a homeowner is spending today will someday be ripped out and done all over again.

Remodeling is maintenance. About every 10-20 years design trends make things dated and up for renovation.

The harvest gold refrigerator that was awesome in it's day is ugly today. That 4" white ceramic tile in the bathroom was awesome in the 90s, today it's dated when everybody wants natural earth tone looks. That Formica counter top in the kitchen was awesome in the 90s, now it's hideous and you need to get some granite in there.

When you renovate to bring something up to date it is simply maintenance to keep your home current and compete in the marketplace if you were to sell it.

If the roof is shot, putting on a new one is just maintenance. It's supposed to have a roof that looks good and functions.

oldfrt · 11-05-2009, 09:09 PM

Finey,

Like I said Mike,she had some good points,but didn't give the flip side any credence.

Many people have made money doing improvements,remodeling,maintanence,whatever and selling in the right market.

Buy in the right market,sell in the right market.That's my point.
Then there is a profit,then this was an investment.

If you own rental property,it's provides cash flow,you keep it up(Maintanence,updates whatever),write off expenses,earn some income,and realize a profit over your ownership.
Or why would anyone bother.That's an investment.

If you bought when prices were high and update to get the latest non 70's,80's or 90's look ,and price your house out of the market for it's current location and size,than your not being fiscally responsible to yourself and that is the point she is trying to make.

She makes a blanket statement,which does her readers injustice by not giving them the opportunity to realize now is the time to move ahead.
Money is cheap,and with the right circumstances,this would be a good investment with today's dollars,provided you have the right income and a good portfolio.
Borrowing at 6% today is better than 10% in a few years.
I'd call that an investsment.Spending money now to save later.

It's all relative to when you buy,what you improve and how much your total investment(maintainence)is,and when it's sold.

As Liz stated;
Plunging prices finally could shatter our national delusion that home improvements

are somehow an "investment" in our homes.

The catalyst here is plunging prices.

Mike Finley · 11-06-2009, 10:11 AM

I must have mis-read it cause I thought she was writing about homeowners doing remodeling and renovations to the homes they live in not real estate investors buying and selling or holding long term for rentals.

If she is talking about the former, again I agree 100% with her, if she is writing in regard to professional real estate investing then I would disagree.