10 Ways to Increase Your Home’s Value

Katie Adams
Friday, October 30, 2009

This article is part of a series related to being Financially Fit

In a dour housing market, wouldn’t it be nice to know that your remodeling project would pay off when you went to sell the property? Remodeling Magazine evaluated the top remodeling projects, how the cost-to-value has changed since the housing market implosion, and which projects are still worth the investment. Using the magazine’s “Cost Vs. Value Report for 2008-2009,” let’s look at some of the best projects you can undertake and recoup the majority of your cost.

Upscale Projects

• Siding Replacement (fiber-cement or foam-backed vinyl). With the economic slump, home buyers aren’t being dazzled by bells and whistles as much as they are improvements that will ensure lower repair and utility bills. Although replacing current siding with fiber-cement has lost value from 2007, it still nets an astonishing 87% ROI. If you prefer a foam-backed vinyl product replacement instead, you can still look to recoup 80% of your cost.
• Window Replacement (vinyl or wood). Windows are not only an aesthetic feature. For most homeowners, they represent one of the easiest ways to lower home heating and cooling bills. By replacing your current windows with more efficient vinyl or wood ones, you can save on your utility bills, attract future home buyers and net a nearly 80% (vinyl) or 77% (wood) return on your investment.
• Bathroom Remodel. Depending on the size and amenities of your desired bathroom, you could expect to pay over $50,000 to tear out walls, repair joists and wall studs, change structural elements and make major layout changes, such as switching a toilet and shower. However big the price tag, you can still expect to recoup nearly 71% of the cost (which would be $36,400 if you have a $50K bill) when you go to sell. This project increased its value since 2007, while its sister project – adding a complete bathroom – fell in value.
• Major Kitchen Remodel. Kitchens are typically the most frequently used room in a home, so it makes sense that investing money here is going to pay off when it comes time to sell. While a major kitchen renovation is usually the most time-consuming and expensive home improvement job (averaging more than $110,000), it’s also one of the most profitable. Regardless of the size of your financial layout, you can expect to get a nearly 71% ROI.
• Deck Addition (composite product). With families cutting their entertainment budgets, they’re spending more time at home, so it makes sense that adding a deck (composite, not wood) is a good investment. You can plan on recouping 63% of your total job cost to boost your home’s value by nearly $24,000 if you paid the average job cost of $37,000.

Mid-Range Projects

While all of the mid-range projects dropped in value versus cost since 2007, there are still numerous projects that will net you a significant ROI. Here are a few of the best bets for your money:

• Deck Addition (wood). If your bank balance can’t swing the higher price tag that comes with composite decking, you may still be able to afford a wood addition on to your home. While a wood deck would cost you, on average, in the neighborhood of $10,000, the resale value it will add to your home is more than $8,600 – an 81.8% return on your investment.
• Siding Replacement (vinyl). Fiber-cement or foam-banked vinyl are often more preferable siding upgrades, but getting vinyl siding replacements instead is still a good choice. You can recoup nearly 81% of your cost which, if the job cost you more than $10,000, means you could add more than $8,200 to your home’s value.
• Minor Kitchen Remodel. With belt-tightening in style, people are turning to minor kitchen improvement projects instead of major overhauls. It turns out that that choice is not only frugal, but financially wise. While major kitchen remodeling jobs can still, on average, return a nice 70% ROI for homeowners, minor kitchen remodeling jobs net an even higher 79.5% return.
• Attic Bedroom. Anytime you can add bedrooms, you’re going to add to the overall value – and listed purchase price – to your home. If your attic’s dimensions allow you to convert it to a bedroom, you may want to consider investing the money to do so. You’ll add some sleeping space and net a nice 74% return when a new buyer puts your home under contract.
• Basement Remodel. If you’re fortunate enough to live in an area with a water table high enough to permit basements, you should think about squeezing all the value you can out of it. By remodeling and finishing a previously-unfinished basement you can expect to get nearly 73% of your investment returned with a higher list price, come time to sell.

Conclusion

If you have savings or access to reasonably-priced credit, it’s worth it to consider home improvement projects that will produce the best return for your time and money. Make sure you work with a reputable, licensed contractor (to avoid costly errors or budget overruns), and before you undertake any project it’s a good idea to check and see if it could significantly increase your property tax bill.

While it may still make sense in the long-run to undertake the project and add overall value to your home, you may need to make a few budgetary changes so that you don’t get caught off-guard when the tax bill comes.

Home Improvement Nightmares

October 31, 2009
Home-improvement prosecutions up in Ocean County

By KATHLEEN HOPKINS
TOMS RIVER BUREAU – Asbury Park Press

It was in March of 2006 when Tanisha Sosa first looked to hire a contractor to build an addition on her Beachwood home so that her aging, sick father could move in with her.

A friend of hers, a fellow nurse, was given what she thought was a good price for a similar home-improvement project from John Dziedzic, a Jackson contractor, so Sosa decided to call him.

“He came in a truck that said “Designer Builders,’ and met me and my two kids,” said Sosa. “He gave me an estimate. There were no signs at that point that this man was not who he said he was.”

Both she and her nursing colleague signed contracts with Dziedzic. Months later, Sosa had already paid Dziedzic more than $100,000 for the project, but only a portion of the work had been done, she said.

“I had beams, but no walls, no Sheetrock, half the plumbing work done, half the electrical work done, and I had already paid him the full price for having everything done,” Sosa said.

“Wires were left all over the place,” said Sosa, who at the time was going through a divorce. “My gas line was inside my house. . . . I had plastic wrap in door spaces. I had a mouse run in one night.”

When she started asking Dziedzic why the work wasn’t completed, she didn’t get any answers. Then, she got a call from the plumber who said he hadn’t been paid, although she had already paid Dziedzic for the plumbing work, she said.

Sosa eventually went to the Ocean County Prosecutor’s Office, which prosecuted Dziedzic for theft from 13 victims, including Sosa and her colleague, who each had paid him for home-improvement work that was either never done or not completed. Dziedzic also was prosecuted for being an unregistered home-improvement contractor.

Dziedzic, who pleaded guilty to the offenses, was sentenced in May to five years in prison with a requirement that he serve a year before he can be considered for release on parole. He was ordered to make a total of $99,628.35 in restitution to his victims.

Ocean County has been in the forefront of prosecuting unscrupulous contractors like Dziedzic. The Ocean County Prosecutor’s Office in 2006 was the first in the state to prosecute contractors under a state law that went into effect on Jan. 1, 2006, requiring home-improvement contractors to register with the state Division of Consumer Affairs, said Senior Assistant Prosecutor Martin Anton of the prosecutor’s Economic Crimes Bureau.

Last year, the office prosecuted a total of 18 home-improvement contractors, 16 of whom were unregistered, Anton said. So far this year, it is prosecuting 21 contractors, including 17 who are unregistered he said.

Earlier this year, the prosecutor’s office engaged in a sting operation that resulted in charges brought against eight unregistered contractors.

“The hardworking guys who are out there trying to make an honest dollar are not the targets of our efforts,” said Ocean County Prosecutor Marlene Lynch Ford.

“While we recognize the fact that a person can be an honest contractor and just not be registered, in almost any case where someone takes off with the money, they’re not going to be registered,” she said.

“What makes it particularly sensitive to Ocean County is the reality that we have one of the highest concentrations in the nation of seniors living in senior communities,” Ford said. “They are dependent on the handyman. There are a lot of fly-by-night home-improvement contractors who prey upon the easy pickings of our retirement communities.”

In Monmouth County, which doesn’t have as high a concentration of senior citizens, the Prosecutor’s Office doesn’t have a special unit, like in Ocean County, to target unregistered contractors, said Administrative Assistant Monmouth County Prosecutor Michael K. Cunningham. But if a homeowner complains about a contractor, the office will investigate and prosecute, if warranted. While the office may not target contractors just for being unregistered, it does prosecute contractors in theft cases, he said.

A recent example is that of Michael Rosko, onetime owner of Innovative Designs Inc. in Colts Neck, who took more than $72,000 from six customers in Monmouth and Ocean counties in 2007 and 2008, but never delivered or installed the cabinets. Rosko pleaded guilty to the thefts. He was placed on probation for five years. Superior Court Judge Ira E. Kreizman, in sentencing Rosko on Oct. 9, also ordered him to repay more $72,604 to his victims.

While many disputes with contractors stemming from poor workmanship do not rise to the level of criminal prosecution, unregistered home-improvement contracting carries a potential 18-month prison term upon a conviction, and theft charges sometimes accompany prosecutions for being unregistered. Maximum prison terms for theft can range from five to 10 years, depending upon the amount stolen.

William Scaturro, director of the Ocean County Department of Consumer Affairs, said that when his department receives complaints about contractors, it first tries to negotiate resolutions to the disputes. But, if that doesn’t work, the department can bring contractors to municipal court for being unregistered or for violating the state’s Consumer Fraud Act. Fines for first-time offenses are $10,000, and $20,000 if the victim is a senior citizen, Scaturro said. The most serious complaints are referred to the county prosecutor’s office, he said.

In criminal prosecutions, Anton said he sometimes considers more lenient terms if the contractors can come up with significant amounts of money to repay their victims.

Although Dziedzic was ordered to make restitution to his victims, Sosa said she doubts she will ever see a dime from him. Meanwhile, she was paying $800 a month for the home-equity loan she took out for the addition she hired Dziedzic to build, until she was able to refinance the loan, she said.

“Thank God, I am a nurse and I can work as many hours as my body will allow me too,” she said.

With the help of relatives, Sosa said she is gradually repairing the harm done by Dziedzic.

“Little by little, we were able to fix this and fix that, but we still have some work to do,” Sosa said. “It’s not like we’re millionaires and can come up with another $100,000.”

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