Can They Really Be Considered Investments?
In order to answer the question, it’s important to determine what you expect from your investments.
Most likely, an investor would only consider an investment successful if it provided a “return” on the initial capital invested. However, housing industry studies clearly indicate that most home improvement projects will NOT provide a return on the initial cost of the home alteration, and furthermore, they won’t even allow you to recover the initial capital spent when you resell the home.
Since, in most instances, you don’t even recover your initial investment when you “cash out”, remodeling a home cannot be considered a good financial investment.
However, the decision to improve a home is also a decision to improve your quality of life. If you can assign a value to your family’s enjoyment of the improvement while living in the home, and then factor this “enjoyment value” into your “return on investment analysis”, a home improvement just might be one of the best investment opportunities you’ll ever find.
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