Getting the Most Bang out of that Tax Refund Buck

Have you been anticipating receiving your tax refund this year? Perhaps you want to save it for another rainy day or year; maybe you’ve decided to spend it on home improvements. If you are planning to embark on a few home improvements, it's best to know which of them are likely to pay off if you decide to sell your home and which is a waste of money.

A return on your investment should play a part in your home improvement plan. Your ROI tells you how much money you could recoup when you sell your home. Will that minor bathroom remodeling job be a good investment or not? Should you spend the extra money to fix up the kitchen?

There are many factors to consider when making the decision to give your house a face-lift. Location is always a key issue; not only the neighborhood, but which part of the country. Some improvements are popular with buyers regardless of their region, while others seem to be in higher demand in certain areas of the U.S. But more often than not, sellers can get back a substantial percentage of their expenditure for a variety of well-executed improvements.

Keep in mind that spending more doesn't necessarily mean you'll get back a higher percentage later.

Take a look to see how much a home improvement will cost you versus how much you can recoup when selling your home and this is only a rough estimate;
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1. A Bathroom remodel job may cost $12,000 to $15,789 for an upscale master bathroom and you may only receive $12,000 on your investment.
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2. A major Kitchen remodel may cost you upwards of $20,000 but you may only recoup $12,500 on this investment if you sell your home.

If you're looking to get your money back when you sell, it's a good idea to avoid designs that are very abstract or unusual. Buyers look for a place they can move right into and call their own. When you deviate too far from the values of the everyday modern home buyer, you minimize the pool of potential buyers.

Features that are really customized to your personal taste such as a home theater or wine cellars may not appeal to as wide an audience. Depending on the neighborhood, most buyers may see these fancy add-ons as unnecessary and be unwilling to pay a premium for them, especially in less upscale areas. That's not to say you should not customize your home as you like but when it comes time to sell you shouldn't expect to recoup the money you shelled out.

Homeowners should definitely look around at other houses in the neighborhood to see what is popular. If the average home in your neighborhood has 2.5 baths and your house has 1.5, adding another bathroom could net you a better return than the average when selling.

While updating and renovating your house has personal value to you and something many do to attract more buyers, you should definitely remember that you're not always going to get back what you spend.

Think and choose wisely before spending that tax refund.