In markets where home prices are declining or have flatlined, remodeling decisions are particularly tough to make, especially if you’re remodeling to get your home sold. If you don’t update, your home may not attract buyers. However, if you do update, you may not be able to recoup what you spend.
The secret is to make renovations that are comparable to homes in your neighborhood. Splurge on granite and you’ll be the envy of your friends, but you won’t get your money back at resale if you live in a more modest neighborhood or condo complex. Is your home in a high-end neighborhood? Laminate countertops will save you money, but if you have to sell, high-end buyers will discount their offer because of your kitchen isn’t what they expect, or simply not buy your home at all.
To get the biggest bang for your remodeling buck, try one of these 10 projects, which have the highest payoffs, according to Remodeling Magazine’s 2009 Cost Vs. Value Report (CVR):
1. Spruce up or Replace your Siding
If the exterior of your home is dated, start your remodeling there. Fortunately, siding, paint and other exterior fixes typically bring high rates of return, according to the CVR. New siding and windows are among the least costly upgrades a homeowner can make, yet they can have some of the highest pay-backs.
If new siding is out of the question, fresh paint can change and update a home’s appearance.
2. Add or Repair your Deck
A deck is a double-bottom-line improvement. You can enjoy it now and it will add value to your home for years to come. Building a 16 ‘x 20’ pressure-treated wood deck with a simple pattern costs about $10,600. At resale, you’ll get about $8,700 of that back, a recoup rate of about 82 percent.
A composite deck will cost more, about $15,000, and return less, about 74 percent or around $11,000, but you won’t have to seal it, the CVR shows. If you have a deck already, use bold plantings to emphasize features, or to distract the eye from flaws.
Make sure to check local coverage regulations and obtain the proper permits before starting your project.
3. Update Your Kitchen
Got an older kitchen with a great layout? Update by re-facing cabinets and replacing appliances. Top off your remodeling with new countertops and resilient flooring. Your newly refurbished kitchen will recoup about 80%, the CVR says.
To go green when you update, choose energy efficient appliances and countertops made from recycled materials.
If even a minor kitchen upgrade isn’t in the budget, brighten up your kitchen by giving your old wood cabinets new character. Just sand, paint and add new pulls — it’s a whole lot less expensive than buying new or re-facing cabinets.
4. Replace or Repair Windows
Today’s vinyl, clad and wood windows are not only beautiful, they’re energy efficient and can cut your heating and cooling bills.
Getting ten new 3′ x 5′ vinyl replacement windows runs about $11,000. On average nationally, you’ll get back about $8,100 when you sell, a recoup rate of nearly 77 percent, the CVR finds.
If you have an upscale home, buy upscale replacement windows. Nationally, ten high-end wood windows will cost $17,500, which will earn back $13,500 at resale, or about 77 percent.
5. Kitchen Overhaul
If your home’s value rises and your kitchen’s finishes don’t, it may be time for a major remodel, rather than small fix-ups.
A complete kitchen remodel in a midrange home averages $57,000 and returns about $43,000 at resale, about 76 percent, the CVR says. That price buys 30 ft. of cabinets, an island, laminate countertops, stainless sink, wall oven, cook top, vinyl flooring and appliances.
Need 8 feet or less of countertop? Local granite dealers who sell (or even give away) remnants and charge for cuts and installation are a bargain option.
6. Strip the Bathroom
Since it’s the smallest room in the house, remodeling the bath can carry a relatively small price tag, even when you replace everything.
Putting in a new tub, tiles, vanity, countertop, medicine cabinet, light fixture, floor tile and wall paper will bring you about 75 percent, back at resale, according to the CVR.
To get an even higher rate of return, re-glaze your old tub for a like-new finish for $300 to $400. Remove or replace shower doors for an updated look.
When choosing fixtures and finishes, stay neutral on what can’t be easily swapped out. A black lacquer bath cabinet with a black glass vessel sink may look cool to you, but if you have to sell, such a unique style might not appeal to your new audience: the average home buyer.
7. Make use of Empty Space
It’s almost always cheaper to repurpose existing space than to add square footage to your home. Creating a bedroom in the attic or in another wasted space, like a loft or unused family room, will net you about 74 percent at resale, the CVR reports.
8. Basement Bucks
Basement remodeling is a big project that pays back both personal and financial dividends. You’ll enjoy watching movies, entertaining at the wet bar and can host more guests when you add a full bath to your plans.
Average national cost to create a 20×30 ft. room in the lower level of your home with drywall, a storage area, recessed lighting, laminate flooring, a wet bar and a full bath is about $61,000. You’ll only see about 74 percent, or $44,000, of that back if you have to sell soon, the CVR says.
Always fix flooding problems first. Add French drains, bigger gutters or re-slope the yard to keep water out. Test to make sure the fixes work before investing time or materials in a basement.
Want just the wet bar? Buy 10 linear feet of cabinets, a laminate countertop, a stainless steel drop-in bar sink and an under-counter refrigerator for about $3,000.
9. Adding Space to Add Value
A two-story addition that includes a new bedroom and full bath upstairs and a family room with a fireplace downstairs, is a huge investment, costing, on average, $147,000 nationally. You’ll see about $104,000 of that investment returned to you at sale time, or 71 percent, according to the CVR.
Before you start a large project, know the value of your home and the value of the biggest, best home in your immediate neighborhood. Add your current home value and the cost of the addition. If that number is more than the best home in your neighborhood is worth, you’re unlikely to recoup your money. Instead of remodeling, consider whether you should move to a new home.
Also make sure to check local building regulations and obtain all proper permits.
Landscaping, especially, plant-it-yourself landscaping, offers a great return on investment.
If you’re not sure where to start, local garden centers often offer free design services. You can also peruse your community for ideas and ask the neighbors what works for them.
Focus on making your walkway and doorway a focal point. If your doorway is overwhelmed by greenery, replace overgrown shrubbery with flowering foundation plants mixing heights and colors for eye-catching drama. A walkway leads buyers’ eyes to your door.