Saturday, January 23, 2010

Remodeling your home: Does it pay off?

It is a question homeowners often ask themselves: Should I remodel, or sell, or remodel AND sell?

How can you know which remodeling projects will net the highest return on your investment? Each December, Remodeling magazine conducts a national survey designed to determine just that. It collects data from builders and contractors concerning costs of materials and construction from 80 metropolitan markets, and adjusts for regional pricing variations. Then they survey more than 150,000 appraisers, brokers and practitioners to estimate the resale value for each remodeling project.

Can you guess which remodeling projects typically recoup the largest ROI (return on investment)?

The correct answer -- which has been consistent for many years -- is kitchens and bathrooms. What may surprise you, however, is that a mid-range upgrade will likely reap an average 10% higher rate of return than a super-deluxe remodel. Restraint and pragmatism seem to be the wisest practices in the current economic climate.

Following are the top 6 remodeling projects for the Pacific Northwest, according to this year's survey, that will give you the biggest bang for your buck:

#6 Attic bedroom addition -- Average cost: $60,135; Average ROI: 87.7%

#5 Wood deck addition -- Average cost: $12,838; Average ROI: 91.5%

#4 Basement remodel -- Average cost: $74,974; Average ROI: 91.6%

#3 Siding replacement (fiber cement) -- Average cost: $13,759; Average ROI: 92.1%

#2 Kitchen remodel (minor) -- Average cost: $23,210; Average ROI: 94.8%

And THE #1 project in terms of recouping its cost is:

#1 Entry door replacement!! -- Average cost: Just $1,353; Average ROI: 128%

Surprised by #1? It just goes to show, a first impression can be invaluable, even when it comes to selling your home.

To access the full report, Cost vs. Value 2008-2009, go to http://www.remodeling.hw.net/2008/costvsvalue/national.aspx

No comments: