Recoup your remodeling investment when it comes time to sell.

 Remodeling? Recoup Your Investment When You Sell

Before you pour your savings into a new kitchen and a rainforest shower for the master, think about whether or not you'll be able to recoup your investment when it comes time to sell.

If you have equity in your home, you can make improvements, but don't go over the limit of what other buyers can spend for a home similar to yours in your neighborhood.

While it's tempting to make your home more beautiful, you have to consider the rest of your neighborhood. If most residences in your neighborhood are three-bedroom single-story homes, buyers are unlikely to shop in your area for two-story four-bedroom homes.

Buyers want to shop for a home where there is the most selection of homes that fit their criteria. If they want a swimming pool, they're going to look in neighborhoods where many homes have pools. They won't be aware of your home if you have the only pool in your subdivision.

That's why over-improving for the neighborhood is a bad idea. Not only will you not get your money back for some updates, your home may be harder to sell because of them.

Another reason buyers don't tend to pay as much for updates as you might think is broad differences in taste. Your updates may include choices your buyer wouldn't have made because of several reasons:

• You only improved one or two rooms, leaving the rest of the home looking unfinished.

• Your updates were too radical, such as cold minimalism in a traditional setting.

• Your updates masked a problem but didn't solve it, such as a kitchen that's too small. If the kitchen is still too small after you've put in granite counters, don't expect buyers to care.

• You failed to do necessary repairs and updates that were less visible than the new décor but buyers noticed anyway.

• Your updates are beautiful but require a lot of cost and upkeep.

Buyers want to make a home their own, and don't want to be distracted or confused by design statements that they don't agree with. Enjoy your home while you can, but make sure your new look can be easily depersonalized when it comes time to sell.

Don't expect to set a listing price based on what you've put into your home no matter how long you own it. Your home will be worth market value no matter when you sell, whatever the value is for that point in time.

All the improvements in the world won't change that basic fact. Your home and the improvements you make are only worth what willing buyers say they will pay.

Before you begin renovations, talk to your Realtor and your lender. They will help you develop a reasonable plan for updates that will add value to your home.