Choosing Remodeling Projects That
Increase the Sale Price of Your Home
Too often homeowners assume they will recoup the money they spent on all the home remodeling projects that they made on their real property during the time they occupied it. When they decide to sell their house they are often shocked to find out that they do not recoup 100 percent of their remodeling costs. While recouping remodeling costs shouldn’t be a homeowner’s sole reason for remodeling--often lifestyle or aesthetic reasons are more likely to play into the decision. It still is a good rule of thumb to get an idea of what you might be able to expect to get back at resale.
It will pay off when the homeowner decides to sell, if a savvy homeowner takes the time to do a little research on what remodeling costs will be profitable in the long run before he attempts a major remodeling project. Very briefly, the three most important concepts for the homeowner to remember when considering a remodel is the visibility of the improvement, its relative value to other homes in the neighborhood, and its degree of desirability to the consumer.
The following information was compiled to demonstrate what a home seller can recoup in remodeling costs based on figures provided by Remodeling Magazine and the National Association of Realtors. This information shows what homeowners can currently expect to recoup in their remodeling projects.
Keep in mind that the popularity of some remodeling projects also depends on the regional area of the home remodel as well. For example, siding replacement is not as popular a project on the West coast as it is in the South. Remodeling projects that are done for purely aesthetic reasons, i.e. gazebo’s etc. will usually be viewed by the prospective buyer as a plus but not something they want to pay extra for and therefore, the seller is not likely to recover his expenses.
Furthermore, when considering simple remodeling projects, paint is the most profitable cosmetic improvement of all. Other examples of profitable cosmetic improvements include new carpets and hardwood floor refinishing, fresh landscaping, new light fixtures, and updated window coverings.
Remodeling magazine conducts an annual survey of the remodeling projects that add the most value to your home. The survey compares how the same 18 remodeling projects affected home values in 60 different cities. The 2004 survey, the most recent, was the 18th for the magazine. According to Remodeling, the top five remodeling projects in 2004, ranked in the order of percent of cost recouped at home resale, included additional bath (102.2%) minor kitchen remodel (92.9% of cost recouped), siding replacement (92.8%), midrange bathroom remodel (90.1%), deck addition (86.7%), and midrange bathroom addition (86.4%).
According to the excerpt above, it is apparent that the seller can expect to recoup costs on remodeling projects that add function as well as aesthetic improvement to their properties. An excellent resource on the subject of remodeling and recouping costs is “101 Cost-Effective Ways to Increase the Value of Your Home” by Steve Berges.
By Nef Cortez
Nef Cortez has been a licensed real estate broker and has held various positions in the real estate and mortgage industry 25+ years. If you would like to read more of Nef's pithy and timely advice (with the latest info on local foreclosures), visit his website at Rowland Heights Homes or read his blog at Southern California Real Estate Blog |
