Home Improvement Question

[Bob Battel]

We will be hiring someone to rebuild our back porch. We plan on spending about $4,000 on the project. I figure the current FMV of our house is about $80,000.

How much can I figure the 4K improvement on an 80K house will increase its value? We're not planning to sell the house. We're not planning on borrowing money on the house. I just want a figure to plug in to our personal balance sheet, so I can track the value of the house.

More info: It's a 130 year old farm house. We renovated the inside of the house 3 years ago. The inside is new and modern. We're basically picking an outside improvement project every year. Two years ago was the roof. Last year was the front porch. This year is the back porch. The back porch is very trashy looking. This 4k improvement will greatly increase the curb appeal. It looks really bad right now.

[Jon Holdman]

Most of the home improvements a homeowner makes return less than the amount spent. There are surveys published fairly frequently that give actual returns. Kitchens and baths usually return something like 80% of what you spend. Many other return very little. Repairing a porch is probably one of those things that that has little return.

Honestly, though, I wouldn't worry about this sort of thing. If the porch needs repairs, you want a better porch, and you can afford to spend the cash, spend it. IMHO, a house you live in is not an investment at all. Its just an expensive doo dad. People say "hey, look at my great investment. My house is worth $300K. We only paid $50K for it 20 years ago". Really? You paid nothing in interes, insurance, taxes, repairs or improvements over that 20 years? Of course not. And if you add all those things up, you might find you paid $400K for that $300K investment.

But we all need a place to live. And most of us have a list of needs and desires for where we live. So, its just one of the costs we accept. Fix your porch. Enjoy it. Don't worry about the "investment value" unless you specifically have a plan to sell soon.