If I Remodel Will I Get My Money Back?

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.

Midrange Projects

Project Type

Job Cost

Resale Value

Cost Recouped
Bathroom Remodel $18,511 $11,486 62.1%
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.

Upscale Projects

Project Type Job Cost Resale Value Cost Recouped
Bathroom Remodel $57,103 $30,437 53.3%
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.

 

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