Home Remodels that Improve Value and Comfort

Posted on: June 12, 2007

While the market is currently normalizing from the rapid rise in home prices seen a few years ago, homeowners are not realizing as much of a return on home renovations. At one time it was a no-brainer to make improvements because the home prices were rising so rapidly the investment was quickly recouped. These days homeowners should expect to recoup about 75 to 80 cents on the dollar according to the Cost vs. Value Report 2006 produced by Specpan in association with the National Association of Realtors.

If you are considering a specific project this report will give you an idea what you should expect to regain from the sale of your home. Coming in at number 10 on the West Coast list, adding a bathroom to a midrange home averages a 91% return. You could regain 91% of your investment by adding a deck, and remodeling your basement may return 93% of your costs when you sell. According to the report, homeowners can expect to recoup 96% of the cost of replacing vinyl windows as compared to 102% for wood windows. Certainly, many of the homeowners of older Portland homes would be interested to know that remodeling the attic into a bedroom would only cost them 2% of the improvements (costs recovered: 98%) as well as adding extra living space. At number four on the list is where we start to see gains on investments; adding a story to a one level house shows a 102% average gain. The second most valuable improvement on the West Coast is a bathroom remodel with 103%. THE NUMBER ONE remodel gain is minor kitchen remodel for 106% of the cost as compared to major kitchen remodels which came in sixth with 97% of the expense recovered.

These are average numbers. Certainly the condition, location, and local appreciation rate will affect how much you will recover in costs from making improvements to your home. Remember these costs are also tax deductible, but that is a subject for another blog post.