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By Pam Leibfried
If you’re like me, and are wondering what you can do to increase the value of your home, Remodeling magazine’s recently released Cost vs Value report provides important information on which home improvement and remodeling projects give homeowners the biggest bang for their buck in terms of an increase in resale value.
The new release of the Cost vs Value report rated a steel replacement door for a home’s front entry as the home improvement project that provides the best return on investment for homeowners nationwide. At an average cost of $1,162, a new midrange steel entry door increases the value of a home by an average of $1,122, representing a 96.6% return on investment.
The next most valuable project is adding a wood deck, which costs $9,539 and adds $8,334 in resale value for the average homeowner – an 87.4% return. Converting attic space into an additional bedroom provides an 84.3% return, costing $49,438 for $41,656 of resale value. Next up, at an 83.7% return, is replacing an old garage door with a new one. This costs an average of $1,534 and returns $1,283 in increased home value.
On the flip side, what projects generally show a low return on your investment? The lowest return of the 35 popular home improvement projects measured is for a home office remodel. At a 48.9% return, an office remodeling project costs $28,000 and only adds $13,697 in resale value. Adding a sunroom returns only 51.7% of its $73,546 cost, while adding a new bathroom, at an average cost of $38,186, adds $22,940 in value, a return of 60.1%.
The numbers above are based on national averages for midrange remodels in 101 U.S. cities, but Remodeling’s report also analyzes upscale remodels on the same 35 projects. The winner for upscale projects is siding replacement (fiber-cement), returning an average of 87% of the $13,378 investment. Garage door replacements are near the top, at an 82.9% return, while the addition of an upscale master suite brings up the rear with a cost of $224,989 with only a 56.0% expected return.
If your area of the country has higher or lower remodeling or real estate costs than the national average, you can drill down to regional stats to analyze the return-on-investment trends that are more accurate for your home.
For example, in the East North Central region (Illinois, Indiana, Michigan, Ohio and Wisconsin), a steel entry door returns only 82.5% of the cost investment – compared to the 96.6% national rate. This drops it to second place in the region, just behind garage door replacement at an 83.0% return, but ahead of adding an attic bedroom (81.0%). Sunroom additions, at a 51.0% return, bring up the rear here, just as they do nationally.
In the Pacific region (Alaska, California, Hawaii, Oregon and Washington), steel entry doors are number one at a whopping 113% return, with a new deck in second place at 109% and a minor kitchen remodel in third at 104%. Two projects tied for last in the Pacific region: Both home office remodels and sunroom additions return only 61% of a homeowner’s investment.
The full study results are published on the Remodeling website, and it’s easy to find your region to review local trends. Keep in mind, though, that both remodeling and resale values vary in different cities and towns across a given state, so the numbers for your home may not exactly match the national or regional trend. Be sure that you get detailed competitive cost estimates before beginning any remodeling project. And when you’re ready to finance that project, let Alliant help you out with our low-rate Home Equity Loan or Home Equity Line of Credit (HELOC).