Top Seven ROI Remodels
Projects that get you the most bang for your buck.
Build a better kitchen, bath or bedroom and live by the “bigger is better” mantra if you want the most return for your money on remodeling jobs.
Homeowners who updated their most frequented rooms and those who added on more living space enjoyed the biggest bang for their buck on home improvements, according to Remodeling Online’s latest Cost Vs. Value Report.
The annual report is the result of responses from 300 real estate professionals in 60 markets nationwide. Remodeling Online asked the pros what level of return a given remodeling job would provide if the house were sold within one year of the work.
On the average nationwide, kitchen and bath remodels along with second-story, bath, family room and master suite additions were rated tops.
Experts say newness and spaciousness are key.
“You get the value because it’s all new. People spend a lot of time in certain parts of the home the kitchen, the bedroom. Even though they are unconscious for most of the time in the bedroom, they want to know it’s nice when they wake up. It’s all just psychological,” said Ken Willis, president of the non-profit League of California Homeowners, an Ontario, California-based home remodeling, real estate transaction and financing information portal with 12,000 members.
“Large is in vogue. You get value simply by having more space,” Willis added.
From a minor kitchen remodeling job’s return of 88 percent to a 71 percent return on both a major kitchen remodeling job and a master suite addition, here’s a look at what gives you the top five best returns for your money. Maintenance-related jobs are excluded. For periods longer than a year between the remodeling work and the home sale, expect smaller returns.
Although the data is updated annually, the figures below should give you a general idea of what return you’ll get on your improvements.
|Home Improvement Job||Cost||Resale Value||Cost Recouped|
|Minor Kitchen Remodel||$17,928||$15,278||85.2%|
|Window Replacement (Wood)||$11,040||$9,416||85.3%|
|Window Replacement (Vinyl)||$10,160||$8,500||83.7%|
|Major Kitchen Remodel||$54,241||$43,603||80.4%|
|Attic Bedroom Remodel||$44,073||$35,228||79.9%|
Source: Remodeling Online/Hanley-Wood.
The psychology of newness and more spacious quarters translates into top resale value when several conditions work in conjunction:
Curb appeal is the impression your home’s exterior conveys. It should create an emotional desire to own the home and to live the lifestyle and status it represents, which hopefully continues inside. Curb appeal is what gets the prospective buyer inside to see your new master suite and remodeled kitchen and bath.
Remodeling to Existing Standards
If most of the homes in your neighborhood don’t have a second story and you add one, the neighborhood could drag down the value of your home. If however, you rip out the old kitchen and put in a new one, your home will sell faster and at a better price than comparable homes with the original kitchen.
Ask family, friends, co-workers and others you trust for referrals to licensed contractors specializing in the work you need completed. In states that don’t license contractors, seek those with strong association ties and proof of insurance.
Finding a Contractor
Interview several contractors and don’t favor the one with the lowest estimate. “Frequently they don’t have enough money to do the job and will leave you hanging,” says Salem, Oregon-based Myron E. Ferguson, author of “Build It Right” (Home User Press, $18.95). “Get everything in writing and don’t commit to a verbal contract,” he added.
Willis says the best contractors have lots of solid work they are willing to show you and homeowners who have had quality remodeling jobs often have no qualms sharing success. “For really fine finish work, you just about have to go see something else that this person has done. Fine craftsmen always have some clients willing to show off their kitchens. If they don’t they are just putting up smoke and mirrors,” Willis said.