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Real Estate Remodeling Cost vs. Value

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Which home improvements present a better return on investment?

Frank Tarala from the Principal Brokers Network in Rochester provides the following information:

This is a topic that is regularly researched by the National Association of Realtors in cooperation with Remodeling magazine.  Brokers and appraisers across the country are surveyed to provide their opinions and estimates.

Remodeling is a "rebuilding" of an area of a home with a long term outlook as opposed to a "sprucing up" which is considering a shorter term outlook.  Remodeling usually considers two factors; personal enjoyment of the improvement and it's effect on the resale value of the home.

The report high-lites the top 10 mid-range projects and the top 10 upscale projects.

Inside or Outside.  Where to Start?

The 2012-2013 report is clear, start outside.  Six of the top ten mid-range projects and eight of the top ten upscale projects are exterior improvements and that makes sense.  Outdoor projects make excellent investments because they enhance the buyers first impression of your home.

 

Mid-range Projects                                               Upscale Projects

 

Front Door Replacement                                  Siding Replacement, fiber-cement

Cost:   $1,137                                                                   Cost:   $13,083

Resale Value:   $974                                                 Resale Value:   $10,379

Cost Recovered:   85.6%                                            Cost Recovered:   79.3%

 

Deck, wood                                                       Garage Door Replacement, Insulated

Cost:   $9,327                                                                   Cost:   $2,720

Resale Value:   $7,213                                               Resale Value:   $2,046

Cost Recovered:   77.3%                                            Cost Recovered:   75.2%

 

Garage Door Replacement, Uninsulated                Siding Replacement, foam-backed vinyl

Cost:   $1,496                                                                   Cost:   $13,818

Resale Value:   $1,132                                              Resale Value:   $9,926

Cost Recovered:   75.7%                                            Cost Recovered:   71.8%

 

Mid-range Projects                                               Upscale Projects

 

Minor Kitchen Remodel                                             Window Replacement, vinyl

Cost:   $18,527                                                        Cost:   $13,055

Resale Value:   $13,997                                             Resale Value:   $9,295

Cost Recovered:   75.4%                                            Cost Recovered:   71.2%

 

Window Replacement, wood                              Window Replacement, wood

Cost:   $10,708                                                        Cost:   $16,361

Resale Value:   $7,852                                              Resale Value:   $11,194

Cost Recovered:  73.3%                                             Cost Recovered:   68.4%

 

Attic Bedroom Addition                                             Grand Entrance, fiberglass

Cost:   $47,919                                                        Cost:   $7,088

Resale Value:   $34,916                                             Resale Value:   $4,528

Cost Recovered:   72.9%                                            Cost Recovered:   63.9%

 

Siding Replacement, vinyl                                          Deck, composite

Cost:   $11,192                                                        Cost:   $34,403

Resale Value:   $8,154                                              Resale Value:   $20,532

Cost Recovered:   72.9%                                            Cost Recovered:   59.7%

 

Window Replacement, vinyl                              Major Kitchen Remodel

Cost:   $9,770                                                                   Cost:   $107,406

Resale Value:   $6,961                                              Resale Value:   $64,113

Cost Recovered:   71.2%                                            Cost Recovered:   59.7%

 

Basement Remodel                                                   Bathroom Remodel

Cost:   $61,303                                                        Cost:   $50,007

Resale Value:   $43,095                                             Resale Value:   $29,162

Cost Recovered:   70.3%                                            Cost Recovered:   58.3%

 

Major Kitchen Remodel                                             Roofing Replacement

Cost:   $53,931                                                        Cost:   $33,880

Resale Value:   $37,139                                             Resale Value:   $19,194

Cost Recovered:   68.9%                                            Cost Recovered:   56.7%

How to Interpret This Information

This data is national and is designed to give you a gauge, not a guarantee to what return can be realized on home improvements.  The mid-west region will have different costs to a project than those in the western region.  The percentage of cost recovered is the best comparison statistic to use when considering an improvement, not the cost. 

Top Renovations That Devalue

1)    Over the top kitchen renovations.

2)    Over the top bath renovations.

3)    Pool or hot tub.

4)    Specialized rooms.

Consult Professional, Including a Realtor

A Realtor can relate to the value an improvement adds to your life and as an investment to your homes future value.  We can help establish a practical budget that includes improvements that are desirable to you without alienating future buyers. 

More from Principal Brokers Network in Rochester: http://principalbrokersnetwork.com/about.php

586-215-9933 | 855-726-7767 | 855-PBN-PROS | principalbrokersnetwork@gmail.com

 

 

 

 

 

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