The number of opinions on the value of a particular home remodeling project is at least as large as the number of remodeling projects homeowners might want to tackle. One constant, though, is how the project enhances the value of a home and, ultimately, its resale value.
Remodeling projects can be large (for example, adding a second floor to an existing house) or small (replacing the main entry door). On average among 27 projects included in a recent survey by remodeling magazine, the average residual value one year after the project is completed is 64.4% of the project’s cost.
As a result, all projects are not created equal. According to the ‘Remodeling 2016 Cost vs. Value Report‘ from remodeling.hw.net, on a national basis only one remodeling project yields an increase in value that is more than the cost of the project. The other 26 projects return anywhere from around 91% of the cost to around 56% of costs.
Depending on the region of the country in which the house is located, there may be other projects that return more than their initial cost. In all, there were 77 U.S. markets where the return on investment exceeded 100%. The single project with the highest number of 100%+ returns was installing fiberglass attic insulation, a relatively inexpensive job but one with lasting value.
We looked at the projects that return the least value nationally because some of them struck us as surprising given the conventional wisdom. Note, too, that mid-range costs are based on typical quality materials and the estimates were generated from identical specifications for the work to be done. The report also included projects calling for upscale work that is more expansive and complicated than the baseline mid-range projects.
Here are the five mid-range remodeling projects with the lowest return on investment. The list includes original cost, resale value, percent return, and a description of the project.
> Resale value: $23,727
This project adds a full 6-foot by 8-foot Add a full 6-by-8-foot bathroom over a crawlspace with poured concrete walls and includes the following features: cultured-marble vanity top with molded sink; standard chrome faucets; 30-by-60-inch white fiberglass tub/shower with ceramic tile surround; single-lever temperature and pressure-balanced faucet; white low-profile toilet; general and spot lighting; electrical wiring to code; mirrored medicine cabinet; linen storage closet or cabinet; vinyl wallpaper; painted trim; and ceramic tile floor.
Backup power generator
> Cost: $12,712
> Resale value: $7,556
> Return: 59.4%
Install modular electrical backup system with capacity for providing 70 amps of emergency power in two 240-volt circuits and six 120-volt circuits. Assume existing propane gas supply. Include generator mounted on 2-by-4-four-foot concrete or composite pad, automatic transfer switch, load center, exterior disconnect, and grounding rod. Include 30 feet of conduit and electrical cable for generator connections; grounded cable for circuits; 5 feet of flexible fuel line for connection to existing rigid gas supply line; and automotive-type storage battery.
Master suite addition
> Cost: $115,810
> Resale value: $74,224
> Return: 64.1%
Add a 24-by-16-foot master bedroom suite over a crawlspace. Include walk-in closet/dressing area, whirlpool tub in ceramic tile platform, separate 3-by-4-foot ceramic tile shower, and double-bowl vanity with solid-surface countertop. Bedroom floor is carpet; bathroom floor is ceramic tile. Painted walls, ceiling, and trim. General and spot lighting, exhaust fan; electrical wiring to code.
Deck addition (composite material)
> Cost: $16,798
> Resale Value: $10,819
> Return: 64.4%
Add a 16-by-20-foot deck using pressure-treated joists supported by 4×4 posts anchored to concrete piers. Install composite deck material in a simple linear pattern. Include a built-in bench and planter of the same decking material. Include stairs, assuming three steps to grade. Provide a complete railing using a matching system made of the same composite as the decking material.
Major kitchen remodel
> Cost: $59,999
> Resale value: $38,938
> Return: 64.9%
Update an outmoded 200-square-foot kitchen with a functional layout of 30 linear feet of semi-custom wood cabinets, including a 3-by-5-foot island; laminate countertops; and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposal, and custom lighting. Add new resilient flooring. Finish with painted walls, trim, and ceiling.
Now we’ll list the five “Upscale” projects that offer the least return. A reminder: upscale work is more expansive and complicated than the baseline mid-range projects.
> Cost: $79,380
> Resale Value: $45,006
> Return: 56.7%
Add a new 100-square-foot master bathroom to existing master bedroom over a crawlspace. Include 42-by-42-inch neo-angle shower with ceramic tile walls with accent strip, recessed shower caddy, body-spray fixtures, and frameless glass enclosure. Include a customized whirlpool tub; stone countertop with two sinks; two mirrored medicine cabinets with lighting; a compartmentalized commode area with one-piece toilet; and a humidistat-controlled exhaust fan. Use all color fixtures. Use larger matching ceramic tiles on the floor, laid on the diagonal with ceramic tile base molding. Add general and spot lighting including waterproof shower fixture. Cabinetry shall include a custom drawer base and wall cabinets for a built-in look. Extend HVAC system, and include electric in-floor heating and heated towel bars.
Master Suite Addition
> Cost: $245,474
> Resale value: $140,448
> Return: 57.2%
Add a 32-by-20-foot master bedroom suite over a crawlspace.
Bedroom: Add a spacious sleeping area with lounging/sitting area adjacent to large master bathroom. Include custom bookcases and built-in storage with millwork details; high-end gas fireplace with stone hearth and custom mantle; and large walk-in closet/dressing area with natural light, mirrors, and linen storage. Add French doors to exterior.
Bathroom: Include a large walk-in shower with dual-shower system, stone shower walls and floor, and custom frameless glass enclosure. Add corner-design whirlpool tub bordered on two sides by windows and built into granite or marble platform with custom cabinet front. Include two sinks in separate custom vanities with stone countertops and large mirrors. Create partitioned area for luxury one-piece toilet.
General: Add 5-foot-long hospitality center with bar sink, undercounter refrigerator, custom cabinetry, granite or marble countertop, and microwave. Include soundproofing, in-floor heating, custom wall finishes and hardware, general and spot lighting, and lighting controls.
> Cost: $57,411
> Resale value: $32,998
> Return: 57.5%
Expand an existing 35-square-foot bathroom to 100 square feet within existing house footprint. Relocate all fixtures. Include 42-by-42-inch neo-angle shower with ceramic tile walls with accent strip, recessed shower caddy, body-spray fixtures, and frameless glass enclosure. Include a customized whirlpool tub; stone countertop with two sinks; two mirrored medicine cabinets with lighting; a compartmentalized commode area with one-piece toilet; and a humidistat-controlled exhaust fan. Use all color fixtures. Use larger matching ceramic tiles on the floor, laid on the diagonal with ceramic tile base molding. Add general and spot lighting including waterproof shower fixture. Cabinetry shall include a custom drawer base and wall cabinets for a built-in look. Extend HVAC system, and include electric in-floor heating and heated towel bars.
Deck addition (composite)
> Cost: $37,943
> Resale value: $21,877
> Return: 57.7%
Add a 16-by-20-foot deck using pressure-treated joists supported by 4×4 posts anchored to concrete piers. At one corner, add a second, 10-foot-diameter six-sided platform one step down from the main deck. Include stairs on the smaller deck, assuming three steps to grade. Install composite deck material in a simple linear pattern. Trim the perimeter joists and wrap the 4×4 posts with composite materials to match the decking. Using the same decking material, include a built-in bench and planter along one 16-foot side. On the remaining perimeter, provide a railing system using composite material of contrasting or complementary colors that includes decorative balusters, post caps, and lighting. Railing and trim should provide for overall curb appeal to the outdoor living space by integrating the deck with the home’s color and architecture, creating a custom look.
Major kitchen remodel
> Cost: $119,909
> Resale value: $73,707
> Return: 61.5%
Update outmoded 200-square-foot kitchen with 30 linear feet of top-of-the-line custom cherry cabinets with built-in sliding shelves and other interior accessories. Include stone countertops with imported ceramic- or glass -tile backsplash; built-in refrigerator, cooktop, and 36-inch commercial grade range and vent hood; built-in warming drawer, trash compactor, and built-in combination microwave and convection oven. Install high-end undermount sink with designer faucets and built-in water filtration system. Add new general and task lighting including low-voltage undercabinet lights. Install cork flooring, cherry trim.
Data for the “Remodeling 2016 Cost vs. Value Report” was based on construction cost estimates generated by RemodelMAX and resale value data were aggregated from estimates provided by real-estate professionals on an online survey containing project descriptions and three-dimensional illustrations, plus construction costs and median home prices for each city. Respondents were instructed not to make judgments about the motivation of the homeowner in either the decision to undertake the remodeling project or to sell the house. The survey for this 2016 data was in the field for approximately 10 weeks between August and October, 2015. Nearly 4,000 real estate professionals participated.