Thinking of sprucing up your home?
Many homeowners remodel during the spring and summer, when the weather is cooperative. But whether you plan to do structural improvements, such as replacing the roof, or cosmetic ones, like re-facing kitchen cabinets, it’s essential to consider the payback on your investment first. That’s because not all home-improvement projects translate into a higher price when you decide to sell your home.
Every year, Remodeling magazine publishes its Cost vs. Value Report.
This year’s report compares costs for 20 of the most popular professional mid-range and upscale remodeling projects in 100 U.S. markets—and the results can be surprising.
For example, you might think that renovating a dated kitchen or adding a bathroom would bring you a higher sales price when you sell. Not necessarily. According to Remodeling, nationally, a major mid-range kitchen remodel (average cost: $63,829) yields $37,637 on resale, for a 59 percent return, while a mid-range bathroom addition (average cost: $44,717) yields 59.9 percent. One reason why: Buyers generally have their own vision for key areas of a home like kitchens and bathrooms and therefore tend not to pay extra for features they plan to change.
"You might want a kitchen that looks like a 1980s replica from Stranger Things," says Craig Webb, Remodeling’s editor-in-chief. "But the person you’re selling to might hate an avocado and burnt-orange color scheme. So regardless of what you spent, to the prospect that kitchen needs to go."
There are tremendous regional variations in recouped value.
The types of projects that yield the most return on investment differ depending on where you live. For example, if you live in Miami, replacing your front door with a new steel door (average cost $1,446) returns $1,996 on sale, for a whopping 138.1 percent return on investment. In Denver, however, it’s a garage-door replacement that recoups the most cost of the projects studied by Remodeling, with a 103.7 percent return. And, in San Diego, if you add manufactured-stone veneer to the street-facing façade of your home, you’ll yield a 124.1 percent return on investment when you sell.
If you’ve noticed that projects that enhance curb appeal seem to provide the highest returns, you’re absolutely right.
"Lots of real-estate professionals will tell you that potential buyers begin forming opinions about a home well before they enter it—or whether to stop and go inside at all," Webb says. "A well-maintained exterior projects good vibes regarding how much TLC you’ve given to the place—and adding distinctive elements, such as a handsome door or stone veneer in a neighborhood where nearby homes are bland, can give you a leg up when you’re seeking a higher-than-average bid."