Cost Versus Value: Top Home Upgrades Worth Investing In

costvvalueWhen homeowners decide to invest in remodeling, an important factor to consider should always be whether or not the project will be of value whenever it’s time to sell the house. For homeowners preparing to list in a competitive real estate market, determining where remodeling dollars will stretch the furthest and be the most rewarding in terms of recouping the cost is extremely important.

The Remodeling 2014 Cost vs. Value Report (www.costvsvalue.com) compares construction costs with resale values for 35 mid-range and upscale remodeling projects. The report is produced by Remodeling magazine publisher Hanley Wood, LLC in cooperation with the National Association of Realtors. The data used in the Cost vs. Value Report was collected with the help of REALTOR® Magazine in an online survey between August and October 2013. For the report, Realtors® provided their insights into local markets and buyer home preferences within those markets. The survey gathers information from 101 US real estate markets so it gives a good overview of remodeling trends across the entire US and creates an informative look at what home improvements offer the best resale bang for your buck in specific markets, like the Southeast. You can even narrow the analysis down to just the Atlanta market.

Increasing curb appeal is always a safe bet and the survey revealed exterior and replacement projects topped the list of upgrades that bring the highest returns. For the second year in a row, updating your home’s entry with a new steel door is the number one improvement where the cost nearly matches the resale value according to the Remodeling 2014 Cost vs. Value Report (www.costvsvalue.com).

Realtor Magazine summarizes the top 10 Mid-range Projects for the last year as:

1. Entry Door Replacement (steel)
Job Cost: $1,162
Resale Value: $1,122
Cost Recouped: 96.6%

2. Deck Addition (wood)
Job Cost: $9,539
Resale Value: $8,334
Cost Recouped: 87.4%

3. Attic Bedroom
Job Cost: $49,438
Resale Value: $41,656
Cost Recouped: 84.3%

4. Garage Door Replacement
Job Cost: $1,534
Resale Value: $1,283
Cost Recouped: 83.7%

5. Minor Kitchen Remodel
Job Cost: $18,856
Resale Value: $15,585
Cost Recouped: 82.7%

6. Window Replacement (wood)
Job Cost: $10,926
Resale Value: $8,662
Cost Recouped: 79.3%

7. Window Replacement (vinyl)
Job Cost: $9,978
Resale Value: $7,857
Cost Recouped: 78.7%

8. Siding Replacement (vinyl)
Job Cost: $11,475
Resale Value: $8,975
Cost Recouped: 78.2%

9. Basement Remodel
Job Cost: $62,834
Resale Value: $48,777
Cost Recouped: 77.6%

10. Deck Addition (composite)
Job Cost: $15,437
Resale Value: $11,476
Cost Recouped: 74.3%

The top 10 Upscale Projects include replacing siding, windows, roofing, and garage doors. Bathroom additions are at #10 while bathroom remodeling is tied with major kitchen remodeling at #8. Adding a grand entrance or deck also top the list. While these projects generally are more investment upfront than mid-scale remodeling projects, their return is 60% or higher. Keep in mind, that a 60%+ return on investment doesn’t include the instant curb appeal value a new roof, deck, doors or windows. Curb appeal has an inherent but unquantifiable value in that the more appealing your home’s first impression is for potential buyers, the more likely it is your home will sell quicker and at closer to your asking price. The value there is that you aren’t spending dollars maintain your home while it sits on the market or postponing plans for a new home elsewhere. Add that value to a 60%+ return and any of the top 10 projects become a good investment.

To find information from the 101 cities included in the survey and download free PDFs that include specific metro-area market data, visit www.costvsvalue.com. (Site registration is required.) You can also find a nice slide show of the report’s results when you visit HouseLogic.com.

Posted in Home Ownership, RE News.

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