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 20 projects included in a recent survey by remodeling magazine, the average residual value one year after a project is completed was 56.8% of the project’s 2017 cost. That’s slightly below the 2016 average of 57.9% return.
As a result, all projects are not created equal. According to the ‘Remodeling 2018 Cost vs. Value Report’ from remodeling.hw.net, on a national basis only two remodeling project return more than 90% of the cost of the project. The other 18 projects return anywhere from around 83% of the cost to around 48% of costs.
According to remodeling magazine, returns slipped because project costs rose and resale values fell:
The 3% to 5% gains in cost that we report here were calculated before fall hurricanes and fires began fueling what one building products distributor calls “a freight train of extraordinary demand”—demand certain to keep elevating the prices for many building materials.
Expect, as well, an even greater shortage of skilled workers in disaster-struck markets as those workers struggle to fix up their own homes and employers feel pressure to respond with pay hikes.
Project costs are divided into two groups: mid-range costs are based on typical quality materials and the estimates were generated from identical specifications for the work to be done; upscale projects call for work that is more expansive and complicated and uses more expensive materials than the baseline mid-range projects.
Among the mid-range projects is one that returns more than 90% on the homeowner’s investment and three that return more than 75% but less than 90%. Among upscale projects, only one returns more than 90% and only one returns more than 70%.
Here are the six projects that give the best return.
Garage door replacement (upscale)
> Cost: $3,470
> Resale Value: $3,411
> Return: 98.3%
Remove and dispose of existing 16×7-foot garage door and tracks. Install new 4-section garage door on new heavy-duty galvanized steel tracks; reuse existing motorized opener. New door is high tensile strength steel with two coats of factory-applied paint, and foam insulated to minimum R-12, with thermal seals between pinch-resistant panels. Windows in top panel are ½-inch insulated glass. Hardware includes galvanized steel hinges and ball-bearing urethane rollers.
Manufactured stone veneer (midrange)
> Cost: $8,221
> Resale value: $7,986
This project replaces 300 square feet of vinyl siding from the bottom third of a house with manufactured stone veneer, two separate layers of water-resistive barrier laid over bare sheathing, corrosion-resistant lath and fasteners, and a nominal 1⁄2-inch-thick mortar scratch coat and setting bed.
Deck Addition — wood (midrange)
>Resale value: $9,065
Add a 16-by-20-foot deck using pressure-treated joists supported by 4×4 posts anchored to concrete piers. Install pressure-treated deck boards 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 system using pressure-treated wood posts, railings, and balusters.
Minor kitchen remodel (midrange)
> Cost: $21,198
> Resale value: $17,193
> Return: 81.1%
In a functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace fronts with new shaker-style wood panels and drawer fronts, including new hardware. Replace combination cooktop/oven range and slide in refrigerator with new energy-efficient models. Replace laminate countertops; install midpriced sink and faucet. Repaint trim, add wall covering, and remove and replace resilient flooring.
Siding replacement (midrange)
> Cost: $15,072
> Resale value: $11,554
> Return: 76.7%
Replace 1,250 square feet of existing siding with new siding. Include factory trim at all openings and corners.
Window replacement — vinyl (upscale)
>Resale value: $11,855
Replace 10 existing 3-by-5-foot double-hung windows with insulated, low-E, simulated-divided-lite vinyl windows. Simulated wood-grain interior finish; custom-color exterior finish. Trim exterior to match existing; do not disturb existing interior trim.
Visit the remodeling magazine website for the complete listing of project, costs, and specifications.