Is Your Remodeling Project a Good Investment?
Every home needs some tender loving care over the years. But what if you’re ready to give it a major upgrade or even a smaller remodeling project.
Will it worth it when it comes to resale? Will you get a high return on investment (ROI)?
Those are good questions to ask before you plan any remodeling work, especially costly ones.
Yes, an updated bathroom or kitchen will make your home more appealing to you and any potential buyers, but you might not see that value in your resale price. That’s especially true if you stick with high-end designs and more upscale features.
A recent article by Remodeling magazine called Cost vs. Value Report for 2018 found that more “upscale” projects on average took the biggest hit across the nation when it comes to return on investment, with backyard patio jobs getting the lowest ROI.
The report covers the average cost of 21 remodeling projects and their average resale value one year later. Mid-range projects tended to do better than upscale ones, with the magazine noting that “affordability concerns are leading (real estate) pros to question the value of renovations that would make a house even more expensive at resale.”
In DC, for example, an upscale bathroom addition had a 56.1% ROI, where a mid-range addition had 63.9%. However, a mid-range remodeling was even better at 71.9%.
Whereas window replacement generated a decent ROI, with wood ones at 68.8% and vinyl at 75.3%. Sounds like a good investment!
For the DC area, some of the top projects with the greatest ROI in this report were:
- Wood Deck Addition (mid-range cost of $11,254 with 99% ROI)
- Composite Deck Addition (mid-range cost of $18,266 with 74.6% ROI)
- Manufactured Stone Veneer (mid-range cost of $8,232 with 104.9% ROI)
- Minor Kitchen Remodel (mid-range cost of $22,180 with 85.9% ROI)
- Roofing Replacement (mid-range cost of $21,457 with 82.8% ROI)
At the other end, one of the lowest ROI in DC was an upscale master suite addition at 51.2%. A mid-range addition came in a bit higher at 61.2%. Most buyers want a master suite but they just might not want to see that entire cost reflected in the sales price!
That’s why you should always do your research and carefully consider any home improvement project.
You never want to be the best home on the street and price yourself out of your neighborhood. But there also are times you do want to “keep up with the Jones” or maybe enjoy a sparkling new kitchen yourself!
If you would like to review the RIS Media’s article and also Remodeling magazine’s 2018 report, see links below:
Cost vs. Value Report– To get the DC report, click on South Atlantic and then Washington, District of Columbia.