Are you considering remodeling your home or buying a home that's been remodeled? In addition to your personal preferences, there are a few practical things you need to keep in mind.
Can Remodeling Increase Your Home's Value?
Home remodeling projects can increase your home's value. The problem if you're looking at it from an investment standpoint is that the increase in value is usually less than the cost of the project.
- Garage addition: 60-70%
- Adding an attic bedroom: 65-76%
- Bathroom remodel: 70-78%
- Major kitchen remodel: 70-78%
- Wood deck addition: 80-85%
What these numbers mean is that for every dollar you spend to remodel your home, you can expect its value to increase by that number of cents on the dollar. For example, a garage addition that cost you $10,000 would add $6,000 to $7,000 to your home's value.
Keep in mind that these are only estimates, and your home's value could increase by more or less than those ranges. If a portion of your home was worn out or in disrepair, you could see a larger increase in value if the current condition made it less marketable. If your remodel is in low demand for people looking to buy in your area, you could see a lower increase or even possibly a decrease in your home's value.
So is remodeling worth it? If you plan to live in your home for at least a few more years to enjoy the remodel, you may be happy with recouping less than your full costs. If you're actively looking to sell your home, you probably won't make your money back unless a serious problem is hurting buyer interest.
The Importance of Doing a Remodel the Right Way
When you remodel your home, it's important to make sure you do it the right way. That means quality work without cutting corners, and it also means getting the required permits and inspections.
Why Do You Need Permits and Inspections?
Building permits and inspections are required by local law. The most important reason for having them is to make sure the work is done safely and in line with local building codes. For exterior work, the permitting and inspection process also protects the visual appeal of the area and ensures that there are no disruptions to utilities or other neighborhood services.
When Are Permits and Inspections Required?
Since the rules are local, they will vary based on where you live. You should always check with your local building department or an attorney before starting work. However, there are a few general categories that usually require permits and inspections.
- Fences. Fence installation can be a DIY project, but many areas have height restrictions. Permits also help to identify who installed the fence if there's a dispute over property lines or damage to underground utilities.
- Additions. In addition to adding rooms, covered additions might include sheds, decks, or detached garages. This can potentially include both "actual construction" where you build something from the ground up and pre-made structures, like sheds sold in home improvement stores, so be sure to check your local rules.
- Electrical and plumbing. Any changes to your electrical wiring or plumbing will almost always require a permit and safety inspection. This can even include small projects like running a wire for a ceiling fan or moving your washing machine over a few feet.
- Structural changes. Adding or removing walls, doors, windows, or balcony support poles usually require permits as well. The purpose here is to safeguard your home's structural integrity.
As a general rule, you don't need a permit for minor repairs, decorative work, or fixture replacements. This might include painting, new flooring, changing a faucet, or replacing an oven as long as you aren't doing any additional electrical or plumbing work. Again, be sure to check the rules for your specific area.
How Do You Get a Permit?
To get a permit, contact your local building department (different areas may call it different things). Applications may be online, by mail, or in-person, and there is usually a few. For minor work, you may only need to provide a simple explanation. For major work, you may need to provide building plans.
If your jurisdiction requires inspections, the permit is conditional on passing the inspection. You may need to schedule inspections at various phases during the project and upon completion. If you don't pass an inspection, you'll be told how to correct the issue and schedule a new inspection.
If you hire a contractor to do the work for you, they can usually take care of the permits for you.
What Happens if You Don't Get a Permit?
Especially for interior DIY projects, it can be easy to get away without getting the required permits. Many people do work without knowing they needed a permit, and some deliberately evade the permitting process. However, there are two major risks of not getting the permits you need.
- Your safety may be at risk. Improper electrical work can lead to an electrical fire. Improper plumbing work can lead to leaks or sudden bursts of scalding water from your water heater. Structural weaknesses may collapse or do irreparable damage during an earthquake, high winds, or even normal settling.
- You may not be able to sell your home. If a pre-sale home inspection discovers un-permitted work, you may not be able to sell your home until you correct the issue. Depending on where you live and the type of work, you may have to request a city inspection and pay a fine, or you could even have to redo the entire project under a proper permit.
What Buyers Need to Look for When Buying a Remodeled Home
If you're a buyer interested in buying a remodeled home, you need to think about many of the same things as the previous owner who did the remodel. If the work was done unsafely or poorly, you run the risk of moving into a home where you could be in danger, or you could face a large repair bill down the road.
Even if you're satisfied with the quality of the work, you should use caution before you accept work that was done without a permit.
- You may need to correct the problem before a future sale. Even if un-permitted work passes inspection when you buy, there's a possibility that it won't pass the inspection when you go to sell. You might not face the same penalties as someone who did the work without a permit, but as the current owner, you'd still be responsible for correcting anything that isn't up to code.
- You may have problems with future remodels. If you try to pull a permit or request an inspection for your own remodeling project, the inspector may notice the un-permitted work. In that situation, your building department might require you to remediate the prior illegal work before approving your new project.