One of the biggest reasons homeowners elect to remodel aspects of their home is to improve its value. Updating a kitchen, bath, or basement will not only do that, but add years of enjoyment at the same time! Furthermore, a major consideration must be which home remodeling projects give homeowners the most return on their investment (ROI)? For this week’s blog, we wanted to touch upon a study that highlights those projects that offer the best ROI.

According to Remodeling Online’s latest Cost vs. Value Report, homeowners who updated their most frequently used rooms or added on more living space saw the highest ROI for their home improvements.

Using responses from 300 real estate professionals in 60 markets nationwide, the annual report asked what level of return a given remodeling job would provide if the house were sold within one year of the work. Not surprisingly, kitchen and bath remodels, and second-story, bath, family room and master suite additions were the top rated nationwide.

From a minor kitchen remodeling job’s return of 85% to an 80% return on both a major kitchen remodeling job and a master suite addition, here’s a look at what gives you the top return for your money. This data is updated annually, but the figures below should give you a general idea of what return you’ll get on your improvements.

Best Returns

Home Improvement Job Cost Resale Value Cost Recouped
Minor Kitchen Remodel $  17,928 $15,278 85.2%
Window Replacement (Wood) $  11,040 $  9,416 85.3%
Bathroom Remodel $  12,918 $10,970 84.9%
Window Replacement (Vinyl) $  10,160 $  8,500 83.7%
Two-story Addition $105,297 $87,654 83.2%
Major Kitchen Remodel $  54,241 $43,603 80.4%
Master Suite Remodel $  44,073 $35,228 79.9%
Source: Remodeling Online/Hanley-Wood
For the sake of this study, maintenance-related jobs are excluded. Additionally, it should be noted that experts believe that newness and spaciousness are key. For periods longer than a year between the remodeling work and the home sale, expect smaller returns.

 

Resale Value

The psychology of newness and more spacious quarters translates into top resale value when several conditions work in conjunction:

  • Curb Appeal – Curb appeal is the impression your home’s exterior conveys. It should create an emotional desire to own the home and to live the lifestyle and status it represents, which hopefully continues inside. Curb appeal is what gets the prospective buyer inside to see your new master suite and remodeled kitchen and bath.
  • Remodeling to Existing Standards – If most of the homes in your neighborhood don’t have a second story and you add one, comparable home prices in the neighborhood could pull the value of your home down. If, however, you rip out the old kitchen and put in a new one, your home will sell faster and at a better price than comparable homes with the original kitchen.
  • Quality Work – Ask family, friends, co-workers and others you trust for referrals to licensed contractors specializing in the work you need completed. In states that don’t license contractors, seek those with strong association ties and proof of insurance.

Renovating with ROI in mind can help improve your home’s value – not only over the long run, but short-term as well. Although it may not return exactly what you invested in it, your remodeling project can add appeal and help set your home apart from others on the market.

Finding a Contractor

If you are looking to add value to your home, especially if you’re looking to sell in the next year or so, you’re in the right place. The remodeling professionals at MDV can help you to plan, budget and implement your remodel. Contact us now for a fast, free estimate!

*header image courtesy of Alexi Kostibas/Flickr