2011-2012 Cost vs. Value: Which Remodeling Projects Pay Off the Most?

I’ve talked about this before but it’s one of those posts that bares repeating. When tackling home remodeling projects, you’ll find some projects pay off more than others at times of resale. Remodeling Magazine, in conjunction with REALTOR® Magazine, recently released findings of its annual Cost vs. Value report for 2011-2012, revealing which remodeling projects offer the biggest bang for your buck.

Overall, the trend right now is replacement over remodeling–swapping out the old for the new rather than doing a total gut job, which can be much more costly. Clients ask me this question all the time. And the standard short answer was put your money in kitchens and bathrooms and finishing unfinished spaces. However, this years cost vs. value report found a few unexpected projects that are supposed to be worth your while.

This year’s Cost vs. Value report found that exterior replacement projects–such as new garage doors and a new entry door–offer some of the best returns at resale, allowing home owners to recoup close to 70 percent or more of the costs of the project at times of resale. Not what I would expect.

The following are the top, mid-range projects from this year’s report, based on what home owners stand to recoup at time of resale:

1. Replacing the entry door to steel

Estimated cost: $1,238

Cost recouped at resale: 73%

2. Attic bedroom (converting unfinished attic space into a bedroom with bathroom and shower)

Estimated cost: $50,148

Cost recouped at resale: 72.5%

3. Minor kitchen remodel (including new cabinets and drawers, countertops, hardware, and appliances)

Estimated cost: $19,588

Cost recouped at resale: 72.1%

4. Garage door replacement

Estimated cost: $1,512

Cost recouped at resale: 71.9%

5. Deck addition (wood)

Estimated cost: $10,350

Cost recouped at resale: 70.1%

6. Siding replacement (vinyl)

Estimated cost: $11,729

Cost recouped at resale: 69.5%

Keep in mind when looking at this list that there are other ways to enhance value other than spending $20k on one project. However, if you have the means, take note of the list provided but also always make sure to take care of any major systems (roof, sewer, furnace, windows etc) that need attention in your home before remodeling something. It’s so much more fun to remodel and get creative as opposed to replace old windows with new ones, but trust me, you will be glad you did. Get the boring stuff out of the way and then move onto the fun stuff.

But if you are like most people, you don’t have a lot of $$ lying around. Yet there are a lot of things you can do yourself. Painting, getting new hardware for cupboards and drawers or cleaning up your yard are a few minor but very important things you can do yourself that definitely improve value and will pay off in the end. I promise.

by Betsy Ballantyne (some info provided by Realtor.org)

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