Home improvements can add livability, value

First, the good news.

At a time when many investments are in the tank, home improvements can add to your home's resale value or simply make it more livable.

Now the not-so-good news: improvements, especially work done poorly or in questionable taste even over-improvements -- can lead to a decline in home value, particularly in the eyes of would-be home buyers.

According to Eddie Ryan of The Home Service Store, homeowners walk a fine line when they plot seemingly minor improvements.

"A home is usually the No. 1 household asset," says Ryan, "yet it will depreciate in value without minimal investment to help retain the value. But homeowners need to honestly assess what they want to improve and why. Sometimes it's to create resale value, other times it is to simply create more enjoyment in the home."

Small job, big return

Improvements with great potential to increase value include kitchen makeovers, bath remodels, room additions and bedroom fix-ups. Ryan discounts the notion that all improvements must be high-dollar to create high-dollar returns.

"A lot of small improvements may have a greater cumulative affect on property value than one big project," says Ryan. He cautions, however, there is no direct correlation between what a homeowner spends and what a homeowner gets back when the home is sold.

He takes the same cautionary tone when discussing sensitive topics of color, decor and design. He says one owner's pride and joy can be a buyer's worst nightmare. Prospective home buyers cast unjaundiced eyes on the appearance of the home, and if the project is poorly conceived, buyers often turn tail. "The buyer sets the value of the home," says Ryan. "You're talking about what a prospective buyer will pay, and unless they share your unique taste, you won't get your money out of the project."

Equally devastating to value is bad workmanship. "There's a lot of critical work in most improvements," says Ryan, "plumbing, electrical and carpentry, not to mention cosmetic details. You might get by on some of these, but you won't have all the skill sets of a professional. All it takes is one misstep." There are still more reasons to hire pros or have the job managed for you. Work you assumed was OK might not meet building codes or pass muster with inspectors when your home is sold, and you might be stuck with expensive overhauls that wipe out any perceived gain in value.

And if you don't care what the neighbors think, think again. "If your home is already on par with others in your area and you add significantly to it, you can actually over-improve your home," counsels Ryan. "Your project must match the esthetics and values of the neighborhood." But there's almost always room for home improvements. "Some people are oblivious to the need for improvements, but if properly maintained and thoughtfully upgraded, your asset can provide a relatively stable reliable return."