It’s the most important, essential argument in any home remodel: Cost vs. Value. For a remodel to truly be worth the investment and payback, value must always win.
To get the full return on the large investment you’re making, you have to think about the value your upcoming remodel will bring to your home and how it will address your home’s most pressing needs, not just tailoring it to your own dream renovation expectations.
“Not all upgrades are smart,” the Washington Post’s Kathy Orton cautions. “Over-improving or over-personalizing can end up costing a homeowner more money.
After all, what is the real value of a $50,000 dream kitchen if it’s covered by a leaky roof?
“If the roof is leaking, buyers won’t get beyond that,” realtor Ron Phipps told HGTV.com. “I don’t care how awesome the kitchen is.”
So which home remodel projects are bringing the biggest Return On Investment (ROI) this year?
Remodeling Magazine’s 2019 Cost vs. Value report compared the average cost of 22 remodeling projects with the value those projects retain at resale in 136 U.S. Markets, based on a survey of 3,000 real estate agents and firms. It wasn’t an easy list to make. To make the list, a home remodel project had to deliver an ROI of at least 50 percent. Investopedia points out that “the ROI of any given renovation project is a function of local market characteristics, the condition of the residential real estate market where the property is sold, and the quality of the work performed.”
As Bank Rate’s Jennifer Bradley Franklin notes, the real value in any successful remodel “is a combination of personal enjoyment and additional value at the time of a home sale.”
Here’s Remodeling Magazine’s Six Home Remodeling Projects that deliver the highest returns:
1) Garage Door Replacement
- Average Cost: $3,611
- Average Resale Value: $3,520
- Cost Recouped: 97.5%
2) Manufactured Stone Veneer
- Average Cost: $8,907
- Average Resale Value: $8,449
- Cost Recouped: 94.9%
3) Minor Kitchen Remodel
- Average Cost: $22,507
- Average Resale Value: $18,123
- Cost Recouped: $80.5%
4) Deck Addition (Wood)
- Average Cost: $13,333
- Average Resale Value: $10,083
- Cost Recouped: 75.6%
5) Siding Replacement
- Average Cost: $16,036
- Average Resale Value: $12,119
- Cost Recouped: 75.6%
6) Entry Door Replacement (Steel)
- Average Cost: $1,826
- Average Resale Value: $1,368
- Cost Recouped: 74.9%
In large housing markets, kitchen and bath remodels delivered sure-fire ROIs of more than 100 percent of cost, offering potential buyers clear signs of smart investments in the home they are considering purchasing. In average-sized markets like Cedar Rapids and Iowa City, minor kitchen remodels delivered 75-83% ROIs and bathroom remodels produced solid 70-78% ROIs.
Kitchens and baths are the areas in a home “where you can tell if money has been well spent or not,” architect Steve Straughan of Los Angeles-based KAA Design Group told HGTV.com. “They’re the most expensive areas of the home in terms of construction. And they’re where people spend time in their homes.”
Remember, the most important factor of any remodel – even more important than the increased comfort level it will bring you and your family – is the return it will bring on the sizable investment you are making in your home.
“Whether you plan to stay in your house for a long time or just a few years, it’s smart to know which home renovations add the most value,” Franklin said.