Kevin McCormally: I am Kevin McCormally of Kiplinger's; I am here with Pat Esswein, Associate Editor of Kiplinger's Personal Finance magazine to talk about Home Remodeling. Pat, lot of remodeling going on, cost of fortune these days, I heard about a window project the other day $50,000, you hear kitchens $100,000 or more. This is pay-off?
Pat Esswein: It can, the way that you look at the pay-off is what you might or the percentage of the cost that you might recover when you resell the house, probably within a few years of doing the project. Annual surveys of this cost versus value show that you can probably expect to get back from between 70% to 100% and maybe on some projects even slightly more.
Kevin McCormally: Okay, do some projects pay back better than others?
Pat Esswein: Absolutely, within the past few years, the kinds of projects that have done quite well have been kitchen remodels, replacement of siding, some bathroom projects, but you have to be careful. The projects that seem to do the best are the so called midrange projects. The upscale projects don't necessarily do well.
Kevin McCormally: Okay, but let's say, I want the fabulous home theater or a wonderful home office, should I not invest in that in my home if I am not going to get a 100% back?
Pat Esswein: It really depends. On those sort of amenity projects, you have to decide what is worth to you. Your home is where you live, it's where you raise your family, it's where you entertain your friends, and if a home theater project is going to give you hours of pleasure with family and friend, then you should go for it.
Kevin McCormally: Can you ever over improve your home, spent too much money invests too much in home remodeling.
Pat Esswein: Technically yes, the old rule of thumb is that you never want to improve your house beyond the average on your street because when you get ready to sale, prospective buyers are going to look at the neighborhood and they are going to say, "You know, I will get a pretty decent house for this price, why would I buy yours for so much more?"
Kevin McCormally: Okay, thank you very much.
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