real estate

Home renovation: 6 worst fixes for the money

Projects that don't pay for themselves
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Why you need three bids for a home project
By Jean Chatzky

6 home projects that don't pay for themselves | Maskot/Getty Images

Projects that don't pay for themselves

If you want to get the most out of your home renovation dollars at resale, stay away from the bathrooms.

It's not that buyers don't love tricked-out bathrooms. (They do.) But professional bathroom remodels and additions are pricey. And at resale you get back slightly more than half of what you spend, according to a recent report by the National Association of the Remodeling Industry and the National Association of Realtors.

If you want to get back every dime you put into a professional renovation, think upkeep rather than expensive upgrades.

Having those hardwood floors refinished will cost about $2,500 -- and you'll get it all back at resale, according to the study.

There's also one project that actually makes money for homeowners: a new roof. Typically running about $7,600, a professionally installed roof returns 105% of that at resale, the study found.

When it comes to 20 popular professional home renovation projects that remodelers and Realtors studied, here are the 6 that return the smallest percentage at resale.

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Bathroom addition © Iriana Shiyan/Shutterstock.com

No. 1: Bathroom addition

Typical cost: $50,000; 52% recouped at resale

Adding a bathroom from the foundation up isn't a project for the faint of heart. Or the shallow of wallet.

"In my experience, the 2 most expensive rooms of the house are the bathroom and the kitchen," says Justin Fichelson, Realtor with Climb Real Estate Group, who's featured on Bravo's "Million Dollar Listing San Francisco."

"And the bathroom or the kitchen can really make the sale," he says.

With bathrooms in his high-end market, "people want to feel like they're in a spa," Fichelson says. "They want luxury and comfort."

With a moderately priced home, "if you have 3 or 4 bedrooms and add a master bathroom suite, I definitely see some value in that," says Justin Knoll, Realtor with Madison & Company Properties and past president of the Denver Metro Association of Realtors.

And that value tracks, says Knoll. "That's usually what we coach people -- you get about half your money back" at resale."

So have it done years before you sell -- so that you can enjoy it, too, he says. That way, you get your money's worth for the other half, too.

Data source: "2015 Remodeling Impact Report" by the National Association of the Remodeling Industry and the National Association of Realtors

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Master suite addition © Breadmaker/Shutterstock.com

No 2: Master suite addition

Typical cost: $112,500; 53% recouped at resale

Remember those McMansions of the 1990s? "New buyers are turned off by that," Knoll says. To millennials, a large house just means a lot of space they have to fill and more money they have to spend on furniture, he says.

And the same goes for huge master suites, says Knoll. Instead of square footage, "many buyers are looking for some luxury," he says.

In that vein, some popular features include: built-ins, closet organizers, accent walls with wood paneling or tile, and coffered ceilings, says Knoll.

Also hot: Lighting sconces. "It's the little touches," he says.

But older generations, especially the ones with money to spend, want more room. "The grander, the better," says Fichelson.

And size matters. "People want a big bedroom, and they want it connected to a big bathroom," he says.

Data source: "2015 Remodeling Impact Report" by the National Association of the Remodeling Industry and the National Association of Realtors

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Closet renovation © All About Space/Shutterstock.com

No. 3: Closet renovation

Typical cost: $3,500; 57% recouped at resale

Organization is vital, but it doesn't come cheap.

A $3,500 remodel for a reach-in closet is "a realistic price," says Matt Laricy, partner and managing broker with Americorp Real Estate. "I don't think anyone realizes how expensive closets are."

Knoll agrees. "They can be spendy, for sure." But it's a check in the plus column for potential buyers. "I think people like it -- as long as it's customizable," he adds, because buyers want to be able to move shelves and features so that your perfect closet will fit them, too.

And "closet space is something people always take note of," says Fichelson. "The bigger the closet, the better."

Even so, a great closet probably won't be a major factor in a sale, says Laricy.

"It's not the reason your house gets chosen over someone else's," he says. "It's a nice perk."

Data source: "2015 Remodeling Impact Report" by the National Association of the Remodeling Industry and the National Association of Realtors

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Bathroom renovation © Shutterstock.com

No. 4: Bathroom renovation

Typical cost: $26,000; 58% recouped at resale

Buyers love bathrooms -- the more modern and luxurious, the better.

But while a sumptuous bath may spur a browser to buy, it probably won't garner 100% of what you spend on it. A more realistic estimate: a little more than half, according to the NARI/NAR report.

"It's like a car," says Laricy. "When you roll a car off the lot, it's never worth as much" as you paid, he adds.

And while you don't want to renovate just to sell, keeping the house up-to-date as you live there will pay off at resale time.

"A dated master bathroom will sit on the market through several price cuts," says Laricy. But updating it could cost you up to $35,000 to $40,000, he says.

So if you really want to squeeze the most out of your money, give yourself plenty of years to enjoy that remodel before you cash out at resale, Knoll says.

It's also vital that renovations fit the house -- and the price range. You wouldn't put that $40,000 bathroom remodel "on a house that sells for $100,000," Laricy says.

When it comes to resale value, add a high-end, luxury master bath "if you have a high-end, luxury property," he says.

Data source: "2015 Remodeling Impact Report" by the National Association of the Remodeling Industry and the National Association of Realtors

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New wood-frame windows © romakoma/Shutterstock.com

No. 5: New wood-frame windows

Typical cost: $26,000; 58% recouped at resale

Windows are like roofs: If everything's going well, you probably don't think about them.

But when it comes time to replace them, you need a pile of money.

And spending $26,000 on a houseful of new windows is "conservative but realistic," says David Pekel, MCR, CAPS and UDCP, national secretary for NARI and the president of Milwaukee-based Pekel Construction & Remodeling.

You could easily spend more -- $40,000 to $55,000 -- depending on the scope of the project and the windows you select, says Tim Shigley, CGR, CAPS, CGP, chairman of the National Association of Home Builders Remodelers and president of Shigley Construction Co. in Wichita, Kansas.

But if your house has that drafty, leaky feeling, this can be the remedy, Shigley says.

And it will also trim your power bills, says Knoll.

"It's not an aesthetic thing as much as it will help keep costs down," he says. "And buyers are 100% focused on what the cost is to run that house month to month."

Data source: "2015 Remodeling Impact Report" by the National Association of the Remodeling Industry and the National Association of Realtors

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New fiberglass front door © MR. INTERIOR/Shutterstock.com

No. 6: New fiberglass front door

Typical cost: $2,500; 60% recouped at resale

When it comes to resale value, a fiberglass front door might not be your best buy.

A steel front door costs $500 less and returns the same amount -- about $1,500 -- at resale, according to the NARI/NAR report.

Depending on the maker and the door, some wood or steel versions could even cost "a couple hundred dollars more" than similar fiberglass versions, Knoll says. But that money can pay off in curb appeal, he says.

Pekel disagrees. "A fiberglass door has a higher level of popularity than a steel door," he says. "I also find them to be more available."

Knoll's tip: If you're replacing a door, opt for one that matches your home's architecture and enhances its character.

While a new front door can freshen up the look of the house, that doesn't mean buyers want to pick up the entire tab for the project.

"I don't think you're going to get a return (at resale) on a door," says Laricy. "Nobody knows doors."

Data source: "2015 Remodeling Impact Report" by the National Association of the Remodeling Industry and the National Association of Realtors

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