We Realtors are asked this question all the time. After all, prudent homeowners would like to know if the value of their home will increase by the cost of the project, right?
Well, the answer to this question may surprise you.
The publisher of Remodeling Magazine, in conjunction with the National Association of REALTORS provides estimated costs for a number of midrange or upscale home improvement projects. Also provided is a percentage of the project’s cost the owners can expect to recoup if they were to sell. The report, “2015 Cost vs. Value”, can be found HERE.
Listed below are a few examples for projects undertaken in the Hartford, CT vicinity.
|Wood Deck Addition||11,101||7,743||69.8%|
|Major Kitchen Remodel||60,251||34,429||57.1%|
|Siding Replacement (Vinyl)||13,271||12,807||96.5%|
The project with the greatest recoupment: an Attic Bedroom Remodel with a return of 104.0% of the cost.
The project with the lowest return: A Home Office Remodel with a 42.1% return.
|Project Type||Job Cost||Resale Value||Cost Recouped|
|Composite Deck Addition||38,676||19,864||51.4%|
|Major Kitchen Remodel||118,940||52,980||44.5%|
|Siding Replacement (Fiber-Cement)||15,297||12,527||81.9%|
The project with the greatest recoupment: a Garage Door Replacement with a return of 125.0% of the cost.
The project with the lowest return: a Major Kitchen Remodel with a return of 44.5%.
So, what’s the moral of the story? Very few remodeling projects provide a dollar-for-dollar return on the investment.
But all is not lost. There are improvements worth doing in anticipation of an upcoming sale. Some will return almost 100 percent of their cost. Others may not have as great a payback, but they can improve the market position of the property in relation to the competition, and thereby help get the property sold. A fresh coat of paint or new carpeting are prime examples.