Should you remodel or make improvements to your home? That’s a big question if you hope to get your investment back when it comes time to sell. But, when it comes to recovering the value of your investment, some improvements are definitely more profitable than others. Among other things, the recovery value depends on current market conditions. If homes are selling quickly, you may see a greater return. You also may see a greater return if you put your money into an improvement that’s in keeping with your neighborhood. Adding a second bathroom in a neighborhood of two-bathroom homes makes sense and will probably return most of your investment. However, using odd colors or customizing in an exotic way may not.
Following is a summary for the Portland/Vancouver area of the 2005 “Cost vs. Value” report published by the National Association of Realtors. The report gives a city-by-city guide on what various home projects will pay back at resale. These figures are based on an aggregate of estimates provided by NAR members. More than 1,600 appraisers, brokers and salespeople participated. The amount recouped for an actual project depends on the condition of the rest of the house, the value of similar homes nearby, the availability of new homes in the area and the rate at which property values are changing.
Bathroom Remodel –
To update an existing 5x7 foot bathroom that’s at least 25 years old by replacing all fixtures, sinks, tubs, cabinets, flooring and re-covering the walls.
- Percentage of cost recouped: 113.3 percent
- Average job cost: $11,302
- Resale value: $12,808
Minor Kitchen Remodel –
To remodel a functional, but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops. To replace oven, cook-top, countertops, and install mid-priced sinks and faucets. Repaint trim, add wall covering and replace existing flooring.
- Percentage of cost recouped: 111.1 percent
- Average job cost: $15,185
- Resale value: $16,877
Window Replacement –
To replace ten existing 3-by-5-foot double-hung windows with wood replacement windows, double-glazed and exterior clad in vinyl or aluminum.
- Percentage of cost recouped: 98.4 percent
- Average job cost: $9,963
- Resale value: $9,800
Basement Remodel –
To create a 20-by-30-foot entertaining area with wet bar, a 5-by-8-foot full bath and a 2-by-12-foot auxiliary room for storage or supplies.
- Percentage of cost recouped: 97.9 percent
- Average job cost: $54,630
- Resale value: $53,500
Attic Bedroom –
To convert an unfinished space in the attic to a 15-by-15-foot bedroom with a 5-by-7-foot bath with shower.
- Percentage of cost recouped: 96.7 percent
- Average job cost: $42,081
- Resale value: $40,673
Siding Replacement –
To replace 1,250 square feet of existing siding with new vinyl siding including all trim.
- Percentage of cost recouped: 84.3 percent
- Average job cost: $7,988
- Resale value: $6,731
Deck Addition –
To add a 16-by-20-foot deck using pressure-treated southern yellow pine joists supported by 4-by-4 posts set in concrete footings.
Include a built-in bench, planter, stairs and railing made of the same composite material.
- Percentage of cost recouped: 79.7 percent
- Average job cost: $11,831
- Resale value: $9,431
Family Room Addition –
To add a 16-by-25 foot room on a crawl space foundation that includes drywall, pre-finished hardwood floor, windows, atrium-style exterior
doors and two operable skylights.
- Percentage of cost recouped: 76.3 percent
- Average job cost: $57,734
- Resale value: $44,038
Roof Replacement –
To remove existing roof to bare wood sheathing and install fiberglass asphalt shingles. Assume a 5-square hip roof, custom flashing at
two average-sized skylights and custom cap treatment at vented ridge.
- Percentage of cost recouped: 73.3 percent
- Average job cost: $11,340
- Resale value: $8,315
Home Office Remodel –
To convert an existing 12-by-12-foot room to a home office installing custom cabinets, a computer workstation and wall cabinet storage. Assume re-wiring for computer, fax machine and other electronic equipment as well as cable and telephone. Include drywall interior, painted trim and commercial-grade carpeting.
- Percentage of cost recouped: 63.5 percent
- Average job cost: $14,107
- Resale value: $8,962
For more detailed information, you may view national and regional numbers at www.realtor.org/realtormag.
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