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Cost vs. Value

Comfort, convenience, and aesthetic satisfaction are some of the main reasons people remodel their homes. But just as important for many is the increase in the value of their property.

How much value a project returns depends on where the house is, what shape it’s in, and the quality of the work. In some markets, value can increase by as much as the cost of the remodel, and sometimes by even more. One important note when considering any remodel – make sure to get a permit if it’s required in your city or state, especially if adding on square footage. Failing to permit your remodel could mean less money when you go to sell.

Of all the projects people undertake, the bathroom remodel would likely contribute most to home value, experts say, returning a national average of 102.2% of cost. Next highest is the minor kitchen remodel, which recoups a national average of 98.5%. The home office, which seems to lack universal appeal, yields the least return – 72.8% nationally.

Below are profiles for additional projects, including major kitchen remodels, family room additions, deck additions, master bedroom suites, and more. Cost estimates the Los Angeles area and are provided by HomeTech, a publisher of estimating and management information for professional remodelers.

MINOR KITCHEN REMODEL

The kitchen is the one thing people really look at. If it’s dated, they know they have to spend some money to change it. Real estate agents say a newly remodeled kitchen remains current for five to ten years, longer in some markets. A minor kitchen remodel is the low-cost way of updating. Minor remodels leave cabinet boxes in place but replace fronts with new raised panel wood doors and drawers. Replace wall oven and cook-top with new energy-efficient models. Replace laminate countertops. Install mid-priced sink and faucet. Repaint trim, add wall covering, and replace existing flooring with resilient flooring. High-end items such as granite or travertine counters and backsplash, top-of-the line appliances, and slate flooring will add even more value.

AVERAGE JOB COST:
$16,640
RESALE VALUE:
$20,000
COST RECOUPED:
120.2%

BATHROOM REMODEL

Update an existing 5×7 bathroom that’s at least 25 years old. Replace all fixtures to include 30×60 porcelain-on-steel tub with 4×4 ceramic tile surround, new single-lever temperature and pressure-balanced shower control, standard white toilet, solid surface vanity counter with integral double sink, recessed medicine cabinet with light, ceramic tile floor, and vinyl wallpaper. Not included are amenities that are quickly becoming popular in more upscale bathroom remodels, such as flat-screen TVs, steam showers, and seamless glass shower enclosures.

AVERAGE JOB COST:
$12,122
RESALE VALUE:
$14,000
COST RECOUPED: 115.5%

DECK ADDITION

More than 30 million American homes have decks, and about 3 million new decks are built every year. It’s hard to go wrong when adding on a deck. It’s like adding an extra room for the warm weather, and they’re not very expensive to build. Decks extend indoor areas outside and provide a space for recreation, dining, even gardening. In cities, decks take the place of yards.

AVERAGE JOB COST:
$12,996
RESALE VALUE:
$14,000
COST RECOUPED:
99.2%

ATTIC BEDROOM

For people who are anxious about their budget, adding space is the way to go. When they stay inside the existing structure, it’s less expensive, so sometimes it’s better to try and do that first before doing a major addition. Converting attic storage space into a bed-with-bath is inexpensive compared to what an addition would cost, but makes the house much more attractive to future buyers. Many adult like the idea of an attic bedroom getaway.

AVERAGE JOB COST:
$46,084
RESALE VALUE:
$45,000
COST RECOUPED: 97.6%


MAJOR KITCHEN REMODEL

Kitchens are most susceptible to changes in taste than other rooms. Wood once gave way to white; now white is giving way to stainless steel. But among real estate practitioners, the consensus is that a fully remodeled kitchen is a strong selling point. Buyers today desire new, top-of-the-line kitchens. Even buyers looking for older homes look for kitchens that offer appliances, wood, and tile that are cutting edge, but still fit the character of their vintage house.

AVERAGE JOB COST:
$43,483
RESALE VALUE:
$41,250
COST RECOUPED: 95%

MASTER SUITE

In new construction, builders set out to create something that could be construed as a suite. Buyers are saying they’d like to find that in an existing home, if they can. The higher the price of the house, the more likely you are to find a master suite. Real estate pros say the master suite appeals to homebuyers from the middle market on up. The private bathroom is a key part of its charm, especially to couples with teenagers. The aging of the U.S. population makes a ground-floor master suite more appealing because it enables older residents to stay in the home.

AVERAGE JOB COST:
$74,385
RESALE VALUE:
$68,750
COST RECOUPED: 92%

FAMILY ROOM ADDITIONS

We’re a society with all these toys – computers, Play Stations – and you need a place to put them. That room is the family room, which has broad appeal to the often unpredictable mix of today’s homebuyers. A young family with kids gets very excited about the family room add-on. Putting a room on a small house is especially valuable. It’s especially attractive in neighborhoods of older houses, typically below average in square footage. It’s also popular in areas where empty nesters are leaving and married couples with young children are taking their places.

AVERAGE JOB COST:
$65,644
RESALE VALUE:
$53,333
COST RECOUPED: 81.2%

Other upgrades to consider include:

Siding Replacement – Average cost = $9,094; Resale value = $10,333; Cost recouped = 113.6%
Basement Remodel – Average cost = $58,825; Resale value = $58,333; Cost recouped = 99.2%
Window Replacement – Average cost = $10,922; Resale value = $11,833; Cost recouped = 108.3%
Roofing Replacement – Average cost = $14,223; Resale value = $11,000; Cost recouped = 77.3%

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