As you work through your home remodeling projects, I’m sure you’re always wondering whether you’re spending your budget in the right places…especially if you bought the property to fix up and then immediately resell.
Remodeling magazine just published their 2018 Cost vs Value Report. They also created an outstanding online tool that will really help you understand which home renovation projects are going to payback the best in your area of the country.
Some Budget Drainers:
- Backyard Patio projects returned less than 50 cents on the dollar. Any landscaping is certainly going to help attract buyers or renters to your property- but going as far as adding a patio might not be a great idea.
- Upscale major kitchen and bathroom remodels returned only about 55 cents on the dollar. Midrange minor bath and kitchen remodels did much better – 70 and 80 cents respectively. Brand new high end kitchens and baths are great, but the story here is that you have to do everything you can to salvage what’s in place rather than just immediately gutting both rooms.
- Master Suite Additions returned only 57% of the cost which initially was a surprise to me. But when you consider the average cost of this project in the United States (around $125,000 for a mid range addition) it starts to make more sense….in many areas this project could represent 25% or more of the house’s total value. Premium master suites are nice and sell houses for sure, but there’s a limit to the premium that buyers will pay for this feature. And in most cases, the seller’s choices and taste aren’t going to exactly match the buyer’s.
Some Great Places to Invest Your Dollars:
- Entry Door Replacement. Steel entry doors returned 91% of the amount invested. Not surprising – you can make a big change in curb appeal for a relatively small investment by replacing entry doors.
- Garage Door and Siding replacements returned from 77% and 98% of the cost. Again the curb appeal factor is at work. I also think that buyers tend to overestimate the cost of exterior repairs (probably because most won’t attempt these jobs themselves) and when they see brand new siding and doors they are willing to pay a premium. Manufactured stone veneer returned 97% of the cost.
- Wood Decks added a significant amount of value, returning up to 83% of the cost. However, using composite materials shrunk the return on investment to as little as 64%.
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.