Too
often homeowners assume they will recoup the money they spent on all the
home remodeling projects that they made on their real property during
the time they occupied it. When they decide to sell their house they are
often shocked to find out that they do not recoup 100 percent of their
remodeling costs. While recouping remodeling costs shouldn’t be a
homeowner’s sole reason for remodeling, often lifestyle or aesthetic
reasons play into the decision, it still is a good rule of thumb to get
an idea of what you might be able to expect to get back at resale. It
will pay off at when the homeowner decides to sell, if a homeowner takes
the time to do a little research on what remodeling costs will be
profitable in the long run before he attempts a major remodeling
project. Very briefly, the three most important concepts for the
homeowner to remember when considering a remodel is the visibility of
the improvement, its relative value to other homes in the neighborhood,
and its degree of desirability to the consumer.
The following information was compiled to demonstrate what a home seller
can recoup in remodeling costs based on figures provided by Remodeling
Magazine and the National Association of Realtors. This information what
homeowners can currently expect to recoup in their remodeling projects.
Keep in mind that the popularity of some remodeling projects also
depends on the regional area of the home remodel as well. For example,
siding replacement is not as popular a project on the West coast as it
is in the South. Remodeling projects that are done for purely aesthetic
reasons, i.e. gazebo’s etc. will usually be viewed by the prospective
buyer as a plus but not something they want to pay extra for and
therefore, the seller is not likely to recover his expenses.
Furthermore, when considering simple remodeling projects, paint is the
most profitable cosmetic improvement of all. Other examples of
profitable cosmetic improvements include new carpets and hardwood floor
refinishing, fresh landscaping, new light fixtures, and updated window
coverings.
Remodeling magazine conducts an annual survey of the remodeling projects
that add the most value to your home. The survey compares how the same
18 remodeling projects affected home values in 60 different cities. The
2004 survey, the most recent, was the 18th for the magazine. According
to Remodeling, the top five remodeling projects in 2004, ranked in the
order of percent of cost recouped at home resale, included additional
bath (102.2%) minor kitchen remodel (92.9% of cost recouped), siding
replacement (92.8%), midrange bathroom remodel (90.1%), deck addition
(86.7%), and midrange bathroom addition (86.4%).
It is apparent that sellers can expect to recoup costs on remodeling
projects that add function as well as aesthetic improvement to their
properties. An excellent resource on the subject is “101 Cost-Effective
Ways to Increase the Value of Your Home” by Steve Berges.
Nef Cortez has been a licensed real estate broker and has held various
positions in the real estate and mortgage industry 25+ years. If you
would like to read more of Nef's pithy and timely advice (with the
latest info on local foreclosures), visit his website at
Rowland Heights Homes or read
his blog at Southern California Real Estate Blog
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