Renovations: Cost vs. Value

If you're thinking of remodeling your current home and plan to stay there for a long time, you don't have any worries. But if you're thinking about renovating and you aren't sure if the cost will be recouped if you should decide to sell in the not too distant future, the situation is totally different. In 2008, remodeling magazine in conjunction with REALTOR magazine, conducted a study and found that some projects appear to recoup considerably less than others. Home office remodels, for example, have been at or near the bottom of the national averages since 2005. A prospective buyer with different space needs might not see the value of a home office, regardless of the cost. On the other hand, minor kitchen remodels ranked among the highest valued projects.

It's important to consider whether a remodeled space reduces the number of rooms or available square footage. For example, carving a half bath out of unused storage space under a staircase is an obvious gain in usuable space. But converting an existing bedroom into a master bath, may reduce the value because it will reduce the minimum expectation of buyers.

Finally, the cost recouped on some projects will depend on the condition of the house, the value of similar homes nearby, and the rate property values are changing in the area. In many situations, the cost of the renovation may not be fully recouped, but it could help the home to sell faster. If you have any questions or want a Realtor's opinion before you get started on a renovation, I'll be happy to advise you.

Project

Attic bedroom

Back up Generator

Bathroom Remodel

Upscale Bath Remodel

Deck Addition

Major Kitchen Remodel

Upscale Major Kitchen Remodel

Minor Kitchen Remodel

Master Suite Addition

Upscale Master Addition

Two story Addition

Home Office Remodel

Basement Remodel

Job Cost

$48,398

$14,040

$15,899

$51,455

$10,601

$56,611

$101,964

$21,246

$101,571

$223,876

$146,538

$28,094

$61,011

Resale Value

$35,694

$8026

$11,857

$36,400

$8676

$43,030

$78,398

$16,881

$67,037

$136,764

$103,553

$15,329

$44,467

Cost Recouped

73.8%

57.2%

74.6%

70.7%

81.8%

76.0%

70.7%

79.5%

66.0%

61.1%

70.7%

54.6%

72.9%