The best kind of house to own is one that needs love. Even in the current downtrodden market, the price for a fixer-upper is significantly less than you'll pay for a home on which someone has lavished attention. The good thing about buying a fixer-upper is you're not paying extra for someone else's idea of what looks great. You can put your own stamp on the property – make it just the way you like it – and still not spend as much as you'd probably pay if you bought the nicest house in the neighborhood.
Every year Remodeling Magazine does its Cost vs. Value Report. The latest report points out that despite declining home prices, the cost of materials and even labor haven't fallen very much. So when you calculate the percentage of return on improvements compared to the value of the home when they are finished, the result isn't very impressive. For some improvements like a home office remodel, which was hot a few years ago, the return looks really shabby.
You can see for yourself what pays off and what doesn't, but keep in mind, the prices cited here are probably higher than many of us do-it-yourselfers would ever pay. Even if you hire out just part of the work, you can save a bundle over the pricing in this report.
One of the best payoffs, according to this report, is getting rid of an old, wooden or fiberglass front door in favor of a new steel one. The cost referenced here is $1,172 installed, and that drives the value of the house up $1,470 or 128.9% of the cost recouped. Even if that's only half true, it's a job worth doing because a tight front door keeps out cold in the winter and heat in the summer. Plus, good security can make you feel safe and, maybe, even lower your insurance bill if you have green homeowner's insurance like this policy from Fireman's Fund.
You can certainly find a basic model, six-panel steel door at Home Depot or Lowe's. I found a plain but adequate one on sale for $99 that spruced up the look of the non-waterside entrance to my house on the lake. I hired a local carpenter to install it for $200, so the whole project cost me a little more than $300.
Because this door was Energy Star approved and met the standard for the Energy Improvement and Extension Act of 2008, I also could take a 10% federal energy tax credit this year -- or next, if I had purchased the door this year. Plus, the state of Michigan, where I live, offers a 30% state tax credit on the cost of the door. Most other states are offering similar deals.
Because tax credits are dollar-for-dollar subtractions from the amount of tax owed, they are particularly attractive benefits. They give my new door a special sheen.
