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How can I increase home value and save taxes at the same time?

Residential real estate can be an excellent investment, but often people worry about the tax increase associated with a major remodeling job.

One of the best ways to increase your return on investment (ROI) in residential real estate is via sweat equity otherwise known as remodeling. Mention remodeling and most people immediately think of the kitchen, and while it’s true an updated kitchen remains a good investment, the humble bathroom is also a strong candidate.

The bathroom has changed little over the past 100 years until recently. Today, the bathroom is no longer seen as a simple utilitarian room, but rather a small oasis of calm and relaxation. More spacious rooms, high-tech showers and even built-in televisions are just a few of the options available for home installation.

Homeowners want to recreate the spa experience at home. The bathroom is the natural space for those small moments of relaxation and personal pampering and even better, an updated stylish bathroom is a good investment. Modern bathrooms are associated with increased home value, on average $15,000 more than homes with outdated bathrooms, but little increase in taxes paid (less than $100 per year on average).

It’s important to maintain the proper ratio on the bathroom remodel, so consult with a qualified appraiser in your local area. Small or large, a bathroom can increase the value of your home, but it should reflect a consistent style and value for the area.