By Melissa Dittmann Tracey, REALTOR(R) Magazine
Home owners are investing in their homes once again, according to recent industry surveys that point to a strong rebound taking hold in home remodeling. Home owners also may be seeing higher gains from some of these remodeling projects at resale, according to the most recent Cost vs. Value Report, which reviews the top remodeling projects that offer the highest returns at resale. The Cost vs. Value Report is conducted each year by Remodeling Magazine, in conjunction with REALTOR(R) Magazine.
So, which remodeling projects offer the potential for some of the biggest pay-backs at resale? The following mid-range remodeling jobs offer the highest returns, according to the 2013 Cost vs. Value Report.
1. Entry door replacement (steel)
Estimated job cost: $1,137
Return on investment at resale: 85.6%
2. Deck addition (wood)
Job cost: $9,327
ROI: 77.3%
3. Garage door replacement
Job cost: $1,496
ROI: 75.7%
4. Minor kitchen remodel
Job cost: $18,527
ROI: 75.4%
5. Window replacement (wood)
Job cost: $10,708
ROI: 73.3%
6. Attic bedroom
Job cost: $47,919
ROI: 72.9%
7. Siding replacement (vinyl)
Job cost: $11,192
ROI: 72.9%
8. Window replacement (vinyl)
Job cost: $9,770
ROI: 71.2%
9. Basement remodel
Job cost: $61,303
ROI: 70.3%
10. Major kitchen remodel
Job cost: $53,931
ROI: 68.9%
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Question: If the average of the Highest Return Updates is only 75%, why do any of them?
Chuck
Chuck, remodeling isn’t necessarily done for resale. If you like your house and location, but want to update the list gives the highest ROI updates. Shopping your contractors and materials in this market should get you 100% (cash) ROI or more. And, what value to you put on personal convenience and enjoyment?
Melissa,
We always look forward to seeing which remodeling projects reap the highest return for homeowners. We especially like seeing basement remodeling in the Top 10 this year since that is something we specialize in! Do you think basements will ever make it into the top 5 since a refinished basement can dramatically increase living space and allow a growing family a bit more elbow room?
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No No No. These figures are return OF investment, not return ON investment. Not one single project breaks even.
Chuck, I have this very same question. I have been told that I cannot sell my house “as is” but need to do improvements, but that I will only get 80% of my money back from the improvements. I get stuck at this point.
I don’t buy any of these statistics. I agree that these are frequent updates. I also think they enhance the saleability of the home. But, how can you put a number on the additional value a give update will bring to the home? No one knows what the home is worth until it sells. So, the pre-update value is just somebody’s guess.
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As a contractor I would agree with your list except that the pricing has a wide range and fluctuates greatly depending on the job
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Landscaping should be number 1 . Often the return is greater than 100 percent.
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I’ve seen this list year in and year out. I have never seen how the statistician(s) arrive at the percent of market value to construction cost. If you to well known price index sites, you’ll see how complex the process is to arrive at general price level increase/decrease. Market value / construction cost ratios are even more complex. Seeing how this process is undertaken would strengthen or weaken the argument.
Nelson Boswell, Jr., SRA
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http://www.nelsonboswell.com
813-215-7384 Ph Tampa
That should read, “If you go to well known price index sites”. In any event, I’m aware that the methodology is largely by survey. Surveys are normally used in addition to hard statistical data, but not in lieu of.
This is seriously big data to have in Blog Post, Great post Mellica,
This number shows :: “9. Basement remodel – Job cost: $61,303 – ROI: 70.3%” Helps me a lot.