For the last several years Remodeling Magazine has been preparing their annual Cost vs. Value Report that ranks top remodeling projects that return the most value to a home.
The recently released 2010-2011 report includes 35 remodeling projects that compare the initial investment with expected return if and when you decide to sell – or you just want to get a better idea of what types of investments provide the best return.
One key thing to keep in mind, however, is that not all projects return money. Why would a remodeling-based enterprise publish a glossy report highlighting that? They don’t. You have to read a little deeper to see “what the numbers means“. We have taken a look at this report on both a national and local level and there are some interesting findings that might be helpful as you think about activities for this spring (if it ever arrives).
Curb appeal is more important than ever before:
The report states that outdoor upgrades recoup more money than interior renovations. If you only complete one renovation, make sure you replace your old front door with a steel entry door; this project on average recoups 102% of renovation costs. Garage doors also make the list of wise investments, recouping from 69% to 83%. Other money-smart renovations include siding replacement and wood window replacement, each recouping up to 80% and 72% percent, respectively.
Make use of wasted space:
Inside the home, it wasn’t kitchen and bathroom renovations that brought in the most money, as would be expected. Rather, the two projects that best retain their value for resale are attic renovations and basement remodels, recouping 72% and 70% respectively. These two projects take advantage of a home’s existing square footage, proving that it’s more cost effective to work with the space you have, rather than add square footage with an extension.
Non-essential features have less resale value:
Three renovations retain significantly less value upon resale: sunroom additions, which recoup only 48% of renovation costs; home office remodels, which recoup 45%; and backup power generators, which recoup 48%. Unlike front entry doors and windows, these renovations are not necessary; a house doesn’t need a home office to still function as a house. Their value depends largely upon what a homebuyer wants and needs in a home. Some homebuyers don’t want sunrooms, and most homebuyers in urban areas don’t need backup generators. The less demand there is for a certain type of renovation, the less its resale value.
Spend less to earn more:
Another surprising finding of the report disproves the old adage, “You have to spend money to make money.” When it comes to home renovations, you have to save money to make money. An affordable renovation usually recoups more of the initial investment than a costly one. The report found that a minor $20,000 kitchen upgrade recoups 72% of renovation costs, but a more expensive $58,000 kitchen remodel only retains 68% of its value on resale.
Although these statistics are relatively close, they do indicate a trend. Other examples include a wood deck with a price tag of $10,000 will recoup 72% but a composite deck that costs $5,000 more will only recoup 66%. A steel entry door will make you money, retaining 102.1 percent of its value, but a more expensive fiberglass door will only recoup 60% of your investment.
Information is reported at several levels, starting with a national perspective. There are details by region (i.e. New England), and Maine is categoriezed by Portland.
Strangely, the data from the report is copyrighted and a direct live link to the report cannot be posted online. Citations include: Copyright 2010 Hanley Wood LLC. Their website is www.costvalue.com.
That being said, if you would like a PDF of the Portland section, send us an email and we will see you get a copy of the relevant information.