You've already decided to move
rather than remodel, but now -- like so many others
in similar situations -- you find yourself thinking
abut remodeling anyway. Why? To make your house more
appealing to would-be buyers, cut the time it takes
to sell it and maybe even get more cash in hand when
And hey, while you're expanding, why not
tuck in a new master bedroom suite above the addition?
You'll get all of your money back when you eventually
sell your house, right?
Not so fast. While many home-remodeling
projects are a great way to add value to your home,
not all of them are ironclad cash-back guarantees.
Before you invest a significant amount
of your precious home equity into remodeling projects,
it's wise to do a little homework on what kind of payback
you can expect for various home projects in your area.
A good place to start is the Cost
vs. Value report published annually by the National
Association of Realtors, or NAR, and Remodeling magazine.
The report provides a synopsis of the top projects,
the average costs of the projects and their average
rate of investment return at resale. It also gives you
a city-by-city guide on what various home projects will
pay back at resale.
Real estate experts caution that these
numbers can differ significantly depending on your state,
city or even neighborhood. So use these numbers as a
starting point, but consider getting the advice of a
Realtor and/or remodeling contractor before you commit
to a big home project. These experts can familiarize
you with remodeling payback figures tailored to your
|Top 5 'good payback'
|According to the
NAR/Remodeling magazine's 2005 Cost vs. Value
report, the projects that will pay back the
most at resale are:
to boost home value
1. Upscale siding (new fiber cement)
Average payback: 103.6 percent of cost
Estimated job cost: $10,393 for 1,250 square feet
National average resale value: $10,771
"Siding makes a huge difference in
a house's resale value, because it's one of the first
things you see. It really defines the condition of the
home," says Moe Veissi of Veissi & Associates
Inc., in Miami. "If other houses around you have
old aluminum or vinyl siding and your siding is nicer
and newer, buyers will notice you. With this project,
you make your house more attractive -- you're not just
improving your insulation value."
Midrange bathroom remodel. This includes updating
an average 5-by-7 foot bathroom that's at least 25 years
old with moderately priced fixtures, a double-sink vanity,
a ceramic-tile floor and vinyl wallpaper.
Average payback: 102.2 percent of cost
Estimated job cost: $10,499
National average resale value: $10,727
"Improving an existing, but outdated,
bathroom is almost always a good investment," says
Finley Perry of F.H. Perry Builder in Hopkinton, Mass.
"An up-to-date bathroom makes your home look like
it's been kept in good repair, and that's what all prospective
homeowners are looking for."
However, Perry cautions homeowners not
to try to personalize their bathrooms too much or spend
megabucks trying to turn them into ultimate home spas.
"Your home is a valuable asset, and you want to
treat it respectfully whenever you remodel," he
In other words, think twice about
adding a pricey imported soaking tub or three separate
shower stalls for your growing family's convenience.
Those renovations might not fit the taste of a buyer
10 years down the road. If that happens, the money you
spent on your bathroom renovation is down the toilet,
so to speak.
Posted: April 12, 2006