Pretty much every show on HGTV and DIY Network these days revolves around some type of home improvement project that is geared towards increasing the home’s value, either to increase the sale price or improve the experience of living there for the current residents.
This is obviously not a new concept, but it has planted a lot of very interesting ideas in the heads of millions of homeowners.
However, you might be surprised to find out that what makes sense on paper does not always translate to actual sales numbers in the real world. More times than not, those expensive granite countertops actually don’t return three times their value when a home finally sells.
So what types of remodeling projects do actually pay off? Which ones don’t?
Let’s dive in and take a look at four different remodeling projects on each side of the profitability coin.
Remodeling Projects That Return Positive Value
The Midrange Bathroom Remodel
According to data from Zillow, the remodeling project that will return the absolute most value when you sell your home is a midrange bathroom remodel. They consider midrange to be something in the $3,000 range and suggest that you can expect that type of project to return a little over $5,000 in value.
The advantage of this type of project is that you are going to be improving the house without spending too much. And obviously, the less you spend the easier it is to recoup that cost with the benefit of an updated bathroom.
The Midrange Window Replacement
Replacing the windows of your home can translate directly to savings on energy costs both for cooling in the summer and heating in the winter. A midrange window replacement is estimated to cost in the neighborhood of $5,000 and can return that amount plus about $750 on top of that.
Once again, we are seeing the benefit of closely monitoring the costs of an upgrade in order to maximize the return on our investment.
The Family Room Addition
Adding additional living space is always a great thing for selling a house, but in order to make sure you get a decent return on your investment you are definitely going to want to keep an eye on those costs. For the average family room addition with a cost of about $10,000, you can expect to recover about $10,700.
At this point, we are getting into the area where we question whether or not that investment is worth the effort. In most cases, that answer depends on how likely the improvements will be to help you sell the house quickly.
Adding Another Story
The final remodeling project that can return positive value is adding an additional story to your house. This type of project can add as much as $50,000 in value to the typical home, but generally costs in the neighborhood of $49,000.
While this isn’t an impressive return in terms of percentages, the added value might be exactly what your house needs to sell in today’s marketplace.
Remodeling Projects That Return Negative Value
The Upscale Bathroom Remodel
We already saw that the midrange bathroom remodel is a huge upgrade to the average home. However, if you take it too far and end up with an upscale bathroom remodel, you are almost certain to lose some of your investment.
The typical upscale bathroom remodel costs around $12,000 and generally returns about $10,440 in value. Is adding that fancy shower or tub really going to be worth it? Not according to the experts.
The Midrange Kitchen Remodel
You’ve probably heard for years that the kitchen is what sells a home. That might be true, but it doesn’t mean that you are going to recoup your investment in even a modest kitchen upgrade.
A midrange kitchen remodel generally costs about $5,400 and returns $2,808 in value.
The Upscale Kitchen Remodel
Upscale kitchen remodels tend to follow almost exactly the same percentage returns of midrange kitchen remodels. The only difference between the two is that the upscale versions can cost around four times as much.
This is yet another area where we know that investing extra money will help to sell a home…just don’t expect to get all of that money back in the sale price. But if those granite countertops really do sell the home for you, they might be worth taking a loss on.
The Basement Remodel
At the very bottom of the list of remodeling projects that don’t pay off is the basement remodel. These projects typically cost in the neighborhood of $10,000 and return less than half of that cost in added value.
It’s interesting to note that with all of these projects the cost of the upgrades is the biggest factor in determining the return. Having enough restraint to avoid the fanciest upgrades while still doing a quality job is always the best way to maximize value.
Adding value to your home through expensive remodeling jobs can be very appealing to anyone who is interested in getting the maximum value out of their property.
And remember, the information above does not take into account the use and enjoyment you’ll get out of the projects mentioned, which is important if you plan to stay in your home a while longer.
But if return on your investment is the primary concern, you are going to want to pay very close attention to the types of projects you take on and analyze the return you are likely to see.
If you are looking for more tips on your home's next remodel feel free to reach out and contact your local Carrington real estate agent! A lot of our agents have some great experience in the remodeling field and can help you figure out which remodel makes the most sense for you as well as your home's value!