Best and Worst Return on Investment when Remodeling Your Home
Remodeling may be a labor of love, but it’s also an investment that can seriously boost the value of your home. Only by how much? Well, according to Remodeling Magazine’s 2016 Cost vs Value Report you’ll recoup an average of 64% of what you paid for a renovation if you sell your home this year (written in 2016).
To arrive at these figures, Remodeling asked consultants in various markets to estimate the average cost for 30 home improvement projects, from adding a bathroom to replacing a roof. Then, they asked real estate agents nationwide to estimate the expected resale value of these renovations so that readers could compare their out-of-pocket costs to how much money they’d get back when it came time to sell their home.
So, what projects gets you the most bang for your home renovation buck? It may not be nearly as sexy (or fun!) as adding a chef’s kitchen or glam bathroom, but attic insulation gets the top spot. That’s right: Stuff some fiberglass insulation into the walls of a 35-by-30-foot attic, and you’ll pay an average of $1,268. But when you sell, you will rake in $116.90 for every $100. For you math-challenged out there, that’s a recoup of 116.9% of your costs. It’s the only home reno on this year’s report that redeems more money than you spend! In a city like Las Vegas that adds up to big efficiency to keep the heat out. An insulated garage door is a big feature as well.
The next best-paying renovation on the list: manufactured stone veneer, offering a respectable 92.9% return.
Meanwhile—sorry, luxury bathroom lovers—the home improvement project that reaps the worst ROI is the addition of a bathroom, at 56.2%.
Check out the best (and worst) returns for home renovations below, including how much you’ll pay (a national figure) and get back if you sell your home this year.
Remodeling Projects with the Most Return
#1: Attic Insulation
Cost: $1,268 Resale: $1,482 Increase: 117%
#2: Stone Facade on the Exterior
Cost: $7,159 Resale: $6,988 Increase: 92%
#3: New Garage Door
Cost: $1,652 Resale: $1,512 Increase: 91%
#4: Steel or Iron Front Door
Cost: $1,335 Resale: $1,217 Increase: 91%
#5: Fancy Garage Door
Cost: $3,140 Resale: $2,830 Increase: 90%
Remodeling Projects with the Worst Return
#1: Bathroom Addition
Cost: $42,223 Resale: $23,727 Recoup: 56%
#2: Luxury Bathroom Addition
Cost: $79,380 Resale $45,006 Recoup: 57%
#3: Master Suite Addition
Cost: $245,474 Resale: $140,448 Recoup: 57%
#4: Luxury Bathroom Remodel
Cost: $57,411 Resale: $32,998 Recoup: 58%
#5: Deck Addition (Upscale)
Cost: $37,943 Resale: $21,877 Recoup: 58%
Take-home lesson? If you’re looking for a general rule of thumb, it’s that less is more: Lower-cost projects generally reap bigger returns, with four of the five projects that cost less than $5,000 ranking among the top five for money back when you sell. Check back for my next blog post on Projects that cost less than $5000 that do give you almost a full return on your investment.
Happy Home Renovating!