The Remodeling Magazine 2016 Cost vs Value report is here and once again is a great resource for real estate investors who purchase and renovate fixer upper houses. The report includes both costs and expected returns for a number of common home remodeling projects and you can even download a report for your city that includes job costs, resale value, costs recouped and comparisons.
As you put together your renovation plan, you’re almost always faced with the dilemma of choosing from countless ways to improve your property with a limited budget. The Cost vs Value report can help guide you toward investing your project dollars wisely.
The video overview provides some great overall direction on where to put your money. Take a few minutes to watch it now:
Attic Insulation, a project that wasn’t measured last year, debuted at #1 on the list of best returns with a 116% return on investment. It also was the only project that returned more than invested. The key – low investment ($1268) on a high perceived value item.
All but one of the top ten best returns were exterior projects. As I mentioned in my review of last year’s report, you can’t overestimate the value of curb appeal. High return projects included manufactured stone veneer (93% return), exterior doors (both entry and garage doors 91% return), siding (78%), decks (75%) and roof replacement (71%). The lone interior project in the top ten was minor kitchen remodel (83% return) – which isn’t a surprise to anyone who has ever sold a house.
The lowest returners were largely major additions. Master suite addition (64%), bathroom addition (56%) Back up power generator (59%). Be very careful about getting into major renovations on a property you plan to sell right away. In some cases, it might make sense to add another bedroom or bathroom, but keep in mind when you add these projects you’re going to dramatically increase your timeline and the overall complexity of getting the house market ready.
Some projects showed up in both the best returns and worst returns categories – it all depends on what type of materials you use. Engineered siding returned 78 cents on the dollar, vinyl only 67 cents. Wood decks returned 75 cents on the dollar, composite decks only 57.
As you set up your fixer upper house projects, make sure to refer back to current Cost vs Value reports. They are valuable aids in terms of helping you make decisions on what projects to tackle and which not to as well as what material grades to use.
What have been the highest return renovation projects that you’ve done on your houses? Leave me a comment below and let all my readers benefit from your experience!