Remodeling Magazine has been publishing it’s Cost vs Value Report for over 30 years. Their researchers canvas thousands of contractors on the final cost to complete the top 20 home remodeling projects. They follow up by interviewing a similar number of real estate professionals to calculate the actual return on investment (ROI) for those completed improvements. Perhaps due to factors related to affordability and manpower, the news for 2019 is not good for those homeowners contemplating a “major” remodel.
Kitchen & Baths: These have been the staple of home renovation for many decades however this year they are reporting a drop in the numbers. For example, a mid-range kitchen remodel cost almost $64,000 while netting a return of just over $37,000. That’s a 59% ROI which is down over 5% from last year and the numbers look worse for those considering a high-end finish. On the other hand, mid-range bathroom remodels saw a net return of over 70%. This makes me think that many of us are eating out then enjoying our bathrooms more often. All joking aside, the smart play is to think conservatively when renovating these rooms.
Room Additions: It’s somewhat safe to say that If you’re adding square footage to your home, do it for enjoyment not home equity. In 2018 a master bedroom addition costing over $126,000 added a whopping $70,000 to the home’s value. Mid-range bathroom additions didn’t fare much better netting just over 59% ROI. However, it’s not all bad news for those folks that are busting at the seams. I can say from experience that a professional basement remodel and/or garage conversion often generates a much higher rate of return. The challenge in all home additions is to enhance the livability without affecting the overall desirability and appeal of the home. Speaking of appeal…
Curb Appeal: Not surprisingly stone veneer/facia, front doors and garage doors tend to provide well over 90% ROI. Another reminder that we never get a second chance to make a first impression. Not covered in the report are the often practical and obvious upgrades homeowners can make to their landscaping. In my experience it’s common to see minor landscape projects net over 100% ROI. Particularly when completed with a blend of the homeowner’s attention with a contractor’s assistance.
Home Systems: Furnace, windows, insulation, built-in appliances, water heater and don’t forget the roof. There is a big range of life expectancy and energy efficiency available and the homeowner should factor that into their equation. If it’s a short-term home, 3-5 years, think mid-range and you’re likely to net 70% + ROI. If you plan to live in the home for some years longer, one could make a case to go top-notch.
Final thoughts: paint, Paint, PAINT! It’s the biggest bang for your buck in almost every case. The subject of “floor-coverings” is a topic unto itself, perhaps I’ll cover that in a later post. Happy remodeling!