The average return on investment for common renovation projects may surprise you
I recently came across a study comparing the cost of common home renovation projects vs the added resale value those projects return to the homeowner. Having been a remodeling professional for over a quarter-century, some of the results were surprising to me, and I thought they may interest you as well.
Here are the numbers for some common renovation projects in the DC Metro area, as compiled in the Remodeling 2014 Cost vs. Value Report (www.costvsvalue.com):
– A standard bathroom remodel costs $15,942 and adds $15,702 (98.5%) to the resale value of a home, while an UPSCALE bathroom remodel costs $50,929 and adds $40,687 (79.9%) in resale value.
– A standard bathroom addition costs $37,690 and adds $27,344 (72.5%) in resale value.
– A standard garage addition costs $49,595 and adds $40,089 (80.8%) in resale value.
– A midrange kitchen remodel costs $54,334 and adds $ $49,436 (91%) to the resale value of a home, while an UPSCALE kitchen remodel costs $108,948 and adds $80,097(74%) to the resale value.
– A standard 2-story addition costs $153,195 and adds $146,037 (95.3%) to the resale value of a home.
– A wood deck addition costs $9,380 and adds $10,535 (112.3%) in resale value.
– A sunroom addition costs $72,552 and adds $46,752 (64.4%) to the resale value of a home.
– Replacing your siding with fiber-cement offers a better return on investment (123.9%) than vinyl (104.7%)
– A standard family room addition costs $79,521 and adds $66,285 (83.4%) in resale value.
© 2014 Hanley Wood, LLC. Complete data from the Remodeling Cost vs. Value Report can be downloaded free at www.costvsvalue.com
My Two Cents
So what does all of this mean at the end of the day? Well, it really depends on what your end goals are. If you’re planning on selling your home in the next year or two, it is a good idea to get a sense of how other homes in your neighborhood that are on the market compare to yours in terms of both floor space and quality. If your home measures pretty well against other homes at the same price point, it may make more sense to focus on smaller upgrades like new siding or straightforward bathroom updates, and avoid large, costly additions. They simply will not pay for themselves at closing.
If, on the other hand, you are planning on staying for a couple of years before moving, a major renovation or addition makes more sense. As your home price appreciates over time, the cost of that investment will also appreciate. And if you live in an upscale area, a great kitchen or luxury master bathroom can make selling your home a lot easier a few years down the road.
Have questions about what kind of value you can add to you home by renovating? If you’d like to speak with me about renovation, or anything else related to real estate and home building, please feel free to call or text me at 571.305.2405, or drop me a note at email@example.com. Or you can just fill out the form below.
Cheers to a Happy and Healthy New Year!