There’s a myth that extra bathrooms and bedrooms always add value to a home. The reality is that smart renovations add value. To help you make smart decisions here’s a list of projects that, on average, provide the highest return and a few that don’t (and boy you’ll be surprised)
Want to get a big bang for your buck and take advantage of the rewards? Consider a significant home renovation project. For instance turning your attic into a bedroom will cost you just over $50,000, according to Remodeling Magazine, but you’ll recoup just over 72% of the costs. If you want to remodel based on resale values, consider the following:
- At a cost just over $1,200 you can replace your front door with a new steel door and get a 102% return;
- Spend close to $15,000 to replace all your windows and you’ll see approximately $10,800 back in your pocket;
- Replace your exterior cladding with vinyl siding, at an average cost of roughly $12,000, and you’ll recoup 72% of the initial outlay;
- Spend $10,000 on a new wooden deck and it should add about $7,500 to the value of your home;
- Remodel your basement for $65,000 and get back 70% of your costs when you go to sell;
- Consider adding a second-floor addition, at an approximate cost of $165,000, and you’ll get just over $107,000 back.
To do all these projects you’ll spend just over $318,000, but you should be able to recoup two-thirds of your costs when you sell. Keep in mind, however, if you over-renovate for your area, you won’t be able to get get top value for your renovation dollar.
For those looking to renovate for immediate sale, then you’ll want to avoid the following renovations, which provide less value when you resell:
- Sunroom additions can cost, on average, more then $74,000 but only recoup about 48% of the costs;
- Adding a back-up power generator has about the same return as a sunroom, but can cost you almost $15,000 in initial installation costs;
- Looking to remodel your home office? Plan on spending close to $30,000 but only recouping about 45% of the costs;
- While paying $40,000 to add another bathroom may appear to be a wise choice, studies show you only get about 53% of your investment back;
- You may need to pay $21,000 to replace your roof, but you’ll see less than 60% of that cost when it comes time to sell.
For more information on Remodeling Magazine’s renovation cost breakdown see their Cost/Value 2010/2011 report.