How to Protect Your Investment

You aren’t alone. This year millions of homeowners—more than ever before—will decide to take the plunge. In fact, by 2015 remodeling is expected to outpace new construction for the first time, according to the Harvard University Center for Housing Studies. Clearly, remodeling can improve aesthetics, efficiency and comfort. But is it a good investment?

Of course, the days of buying older homes, fixing them up and “flipping” them for huge profits are gone. But pros say that if you have a desirable home in a good location, and you plan to stay put for a while, you’ll likely recoup your remodeling investment.

Still, a remodel or addition is only as good as the firm responsible for the project—and choosing the right remodeler requires a bit of research.

For example, in addition to being licensed by the state as contractors, many professional
remodelers have specialized training or certifications.

Both the National Association of Home Builders (NAHB) and the National Association of the Remodeling Industry (NARI) offer certification programs.

NARI certification programs recognize the skills and achievements in six distinct groups of remodeling professionals. For example, a specialist in kitchen and bathroom rehabs may earn a Certified Kitchen and Bath Remodeler (CKBR) designation to showcase his or her specific expertise.

NAHB certification programs include several remodeling-specific designations, including Certified Graduate Remodeler (CGR), Certified Aging-in-Place Specialist (CAPS) and Certified Green Professional (CGP).

CGR is an exclusive designation designed to emphasize business management skills as the key to a professional remodeling operation. These individuals have proven track records of success, must complete a comprehensive training curriculum and pledge to uphold a rigorous code of ethics. Graduates must also meet recertification criteria every three years.

A CAPS designation indicates proven technical, business management and customer service skills essential to competing in the fastest growing segment of the residential remodeling industry—home modifications for the aging-in-place. Aging-in-place adjustments allow people to remain in their homes despite age or physical limitations.

Similarly, CGP certification is on the rise. This designation recognizes those who incorporate green building principles into homes, without driving up the cost of construction. The training provides a solid background in green building methods as well as the tools to reach consumers.

Also, seek referrals from trade associations such as the Tampa Bay Builders Association (TBBA), as well as friends, family, neighbors, coworkers and others who have had remodeling work done.

Independent trade contractors, building materials suppliers, architects, engineers, home inspectors, local lenders and insurance professionals can also provide reputable leads.

Once you’ve developed a list of potential remodelers, check with the local Better Business Bureau regarding unresolved complaints and interview current and past customers about their experiences. Naturally, verify that all licenses and registrations are current and in order.

Once you’ve hired a remodeler and have made the commitment, there are plenty of things you can do to make sure the project is as stress-free as possible.

Of course, even the smoothest project invariably comes with a certain amount of upheaval and a surprise or two, but you can min-imize the hassle by following these steps:

Establish communication.? Does the remodeler listen? Does the remodeler answer questions clearly and candidly? Can you reach the remodeler when you need to? Does the remodeler return phone calls promptly?

Ensure compatibility. You’ll spend a lot of time with your remodeler, so it’s important to have a good personal rapport and a high level of trust. After all, he or she will become like part of the family for the duration of the job.

Agree upon the schedule. You and the remodeler should agree on the schedule up front to avoid conflict and problems later in the project. But remember—a certain amount of flexibility is required when unexpected challenges arise.

Discuss the details. There are many issues, some seemingly minor, that need to be settled before work starts. What times of day will the remodeler and his or her crews be working? How will he or she access your property? How will your property be protected?? How will cleanup be handled?

Understand change orders. You may want to change materials or other project details during the job. Agree in advance with the remodeler on how such changes will be handled before the work begins. Also understand that changes could affect the schedule and the budget, so it’s important that everything be in writing.

Read your contract. The contract should include, among other things, these elements: a timetable for the project, a price and payment schedule, detailed specifications for all products and materials, insurance information, permit information, procedures for handling change orders, provisions for conflict resolution and notice of your rights under the Federal Trade Commission’s “Cooling Off Rule” (your right to cancel the contract within three days if it was signed someplace other than the remodeler’s place of business).

If you do your homework up front, your remodeling project should proceed smoothly and you should be thrilled by the results. After all, a remodeler’s best advertisement is a happy customer.

Remodel ROI
Each year Remodeling Magazine compiles a Cost vs. Value Report, the industry’s only detailed account of investment returns for remodeling projects. The report establishes cost-to-construct benchmarks for common remodeling projects then estimates how much of that investment will be recouped at resale in the current market. These are South Atlantic regional averages so they may vary from prices in Florida.

MAJOR KITCHEN REMODEL
Average cost: $52,659? ?
Average resale value: $41,766?
Expected return: 79.3 percent

MINOR KITCHEN REMODEL
Average cost: $20,221? ?
Average resale value: $16,727?
Expected return: 82.7 percent

FAMILY ROOM ADDITION
Average cost: $70,867? ?
Average resale value: $51,004?
Expected return: 72 percent

BATHROOM ADDITION
Average cost: $33,236? ?
Average resale value: $22,670?
Expected return: 68.2 percent

BATHROOM REMODEL
Average cost: $14,445? ?
Average resale value: $11,388?
Expected return: 78.8 percent

MASTER SUITE ADDITION
Average cost: $88,680? ?
Average resale value: $64,549?
Expected return: 72.8 percent

TWO-STORY ADDITION
Average cost: $127,072? ?
Average resale value: $99,464?
Expected return: 78.3 percent

HOME OFFICE REMODEL
Average cost: $25,438? ?
Average resale value: $15,209?
Expected return: 59.8 percent

DECK ADDITION - WOOD
Average cost: $9,266? ?
Average resale value: $7,936
Expected return: 85.6 percent