Thinking of remodeling to raise your home value? Make sure that you do your research before you go ahead with a home addition or improvement, because calculating return on investment for remodels is complex.
Where to Research Before Remodeling a House
The annual Cost vs. Value Report is the most reliable and widely used guide for estimating return on remodeling investments. Hanley Wood and Remodeling Magazine publish the guide based on surveys conducted with members of the National Association of Realtors. The surveys ask about the changes in anticipated resale value based on specific remodeling projects. The results are tallied and listed as national and regional averages. The top national projects, according to the 2018 report, are:
A $3,470 garage door replacement, which is estimated to recoup $3,411 in boosted resale value.
A $8,221 manufactured stone veneer installation, which will increase resale value by $7,986.
The poorest return on investment comes from building a backyard patio, which recoups less than 50 percent of the cost.
Not all remodels offer the same home resale value. A new countertop will raise the home value, but a granite countertop may be nearly as valuable to a buyer as a much more expensive Italian marble countertop.
Regional Value Differences in Home Remodeling and Additions
In New England window replacements are worth more than in most other regions. On the Pacific coast, ROI on a master suite addition is approximately 10 percent less than the national average. Within regions and even within cities, there are further variations. Their estimates and experiences may differ from the Cost vs. Value report.
The Cost vs. Value report provides valuable estimates for the return on investment of a variety of home improvement projects, but be sure to adjust the numbers based on local expertise.