7 Reasons to Invest in Your NJ Real Estate Home

Why you should stay put in your NJ real estate home for the time being

 

In recent years it was possible to complete a substantial renovation project on your NJ real estate property and actually get back what you put in to the project. According to Remodeling magazine, homeowners recouped an average of 87% of home improvement costs at resale in 2005. Interestingly enough, by 2010 the publication estimated the typical payback at just 60%. If you think this information is enough to dissuade you from a home improvement venture at the current time, NJ real estate home experts claim that these projects make more sense now than they did at the height of the market. Assuming you are satisfied with the uncontrollable factors of your home such as the neighborhood, and the school district, and you are planning on staying for five or more years, improving your home is a smart move.

Below you will find out why investing in your home is a wise idea at this time in the market:

Smart Projects Add Value

At this time in the NJ real estate market, the rule of thumb for estimating the potential payback from a home improvement is simple being that if you are bringing your house up to par with similar homes in your area, you will most likely earn back most of the cost of the renovation. However, if you are surpassing the neighborhood, you probably will not. For the near future, potential buyers will either lowball their bids or pass on your home altogether unless you have already completed this kind of deferred renovation.

Funding is Inexpensive

The current economic climate is a big advantage for those on solid financial footing. Today's historically low interest rates mean that most home-equity lines of credit are charging their floor rates. Also, with the typical bank account and money fund paying far less than 1%, borrowing against your savings barely costs you anything in lost income, but do not endanger your safety cushion.

Contractors are Desperate

Although the construction industry rebounded minimally last year, business is still slow. The best pros in town will happily bid on your job and most likely offer you prices that are 10% to 20% below what you would have paid when real estate was at its peak.

Materials Have Come Down in Price

Luckily for those NJ real estate homeowners looking to remodel, the cost of building supplies has come down significantly. For example, plywood is down 23% since its peak in the mid-2000s, drywall is off 29%, and framing lumber 35%. In general, construction supplies can be found at bargains right now.

Fixing Up Costs Less Than Trading Up

While the median home price is down 22% since 2006, NJ real estate homeowners might think this is an opportune time to trade up for the features they want in a home such as a new master bathroom. However, you cannot assume that you will sell your home so easily in this tough market and then find a new place with all the features you desire. It is important to remember that moving is more expensive than improving your existing home when considering such factors as NJ real estate commissions and improvement costs of the new home, if applicable.

You Can Hold on to Your Low Mortgage Rate

As long as you are not delinquent in payments and have ruined your credit, you have been able to take advantage of recent rock-bottom interest rates to lock in a fixed-rate mortgage below 5%. However, several years from now you will most likely have to give up that loan if you plan on relocating, which can potentially cost you hundreds more each month.

You Can Reduce Your Energy Costs

You do not have to hire a green builder to yield energy savings from an NJ real estate renovation. For example, in a prewar home located in the Northeast a standard kitchen remodel could reduce your utility expenses by as much as $400 per year with new appliances, windows, and insulation. Even years of these savings will never match the cost of the entire project, but think of your lower heating and electric bills as an annual dividend.

The NJ real estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a real estate professional who will provide valuable information and trustworthy advice. For more information about NJ real estate, call us today or click here to be connected with one of our top real estate specialists.