For over a decade, Remodeling Magazine has conducted a survey of what home remodeling projects cost compared with realtors’ perception of how much it would increase a home’s value. It is subjective, for just as two projects may cost the same dollar amount, the design detail can make one much more attractive and appealing than the other, so a buyer will pay more for that home.
Considering that realtors are judging what home remodeling projects would give the most return, they would naturally rank cosmetic features such as a new entry door as giving the highest rate of return on investment. Besides, people who are investing a sizable amount in their home are most likely doing so for their own enjoyment, not for immediately putting it up for sale. The price of a home when it is time to sell is dictated by the market, so perhaps in a seller’s market, realtor’s would rate the return of value higher—and when you go to sell it could be in a much better market than the current one.
For most, the value of remodeling comes from the enhancement experience of the home, and no one can put a price on that! It may be helpful to think that in addition of the pleasure of living in your customized home, that with good design and an appreciating market, you can also get a financial return of investment too. For example, if the national average of a mid-size kitchen remodel is $56,768, and the estimated cost recouped is 67.8%, that would mean, in theory, that the buyer paid $38,485 of your kitchen remodel, while you paid $18,283!
Here are the national average costs of some of the popular home remodeling projects, and rate of relators estimate the homeowner may recoup:
Minor Kitchen Remodel $19,225, 79.3% recouped
Vinyl Window Replacement $13,837, 74.9% recouped
Family Room Addition $84,201, 64.1% recouped
Master Suite Addition $111,245, 61.7% recouped
Bathroom Remodel $54,115, 59.8% recouped
Major Kitchen Remodel $113,907, 59.0% recouped
Happy Home Remodeling!