NEW YORK – Sept. 5, 2014 – As the economy continues its recovery, Americans are stepping up to the plate to remodel. But unlike on popular home-improvement TV shows, most projects don't result in a huge return on investment. And while you may not be planning to sell your home in the short term, it pays to be aware of where you'll get the best bang for your buck.
Topping Remodeling magazine's annual ROI list this year was, of all things, a 20-gauge steel front door. The publication estimates the cost for a midrange home at $1,162, but says it adds $1,122 to the home's value – a 96.6 percent return on investment.
Conversely, way down Remodeling's list are home-office conversions and sunroom additions, both of which are projected to return only about half the capital you put into them.
Why steel doors?
"Because the cost for a professional to install it is relatively low," said Craig Webb, executive editor at Remodeling. "Compare that with the amount of time, effort and planning to do a kitchen or bath. The perceived value by Realtors is very good."
But generally speaking, unless home valuations in your area are on a tear, anything close to a 100 percent return is unrealistic.
"The most you're likely to recoup is 85 percent of what you spent," said Cheryl Reed of Angie's List. The company polls Realtors and remodelers to estimate return on home improvement projects. Reed says if you're going to focus on one area, kitchens typically have the best ROI. They're followed by bathrooms, decks and siding, all at about 80 percent.
The kitchen
Remodeling says that a "minor" kitchen remodel – costing an average of $18,856 – recoups its investment at 82.7 percent.
Steve Seus, a San Diego Realtor, agrees the kitchen is the top priority. "Even if the buyers aren't cooks, (they) still want to see updated appliances," he adds.
It's worth paying attention to finishes and brands for the major appliances. "Stainless and granite are the buzzwords," said Jay Hart, principal at Sold With Style, a New York-based pre-sale consulting firm. "We also encourage people to do a tile backsplash. It's a little more expensive, but don't cut corners here."
In general, you should avoid unique, taste-specific finishes – simple and classic always wins. Most home buyers won't have an appetite (or budget) for major remodels, so a look virtually anyone can get along with will sell better.
While it's helpful to match brands, avoid high-end appliances unless that's what the neighborhood demands. "If your price point doesn't support Wolf or Sub-Zero, you're not going to recoup that investment," said Hart. "GE Profile and LG are good brands people recognize and appreciate, at a fraction of the price."
Cheaper upgrade options are endless. New cabinet pulls and light switches might cost just a few dollars apiece. Faucets and doorknobs are other low-price, high-impact improvements.
The bath
Bathroom remodels tend to be less about brands and more about style and features.
A couple decades ago, whirlpool tubs were all the rage. No more. Homebuyers want larger showers with seamless glass doors, and amenities like steam heads and in-floor radiant heat. But it still pays to keep different types of buyers in mind.
"If you might be selling your house to a family with children, you need a tub somewhere," Reed suggested. Similarly, homes can appeal to boomers and retirees with accessibility features for aging in place. The best of these designs look straight out of a boutique hotel, not a nursing home.
Quality brands still matter, but a top-to-bottom makeover isn't always necessary.
"A fantastic investment is re-glazing tubs and tile floors," suggested Hart, who says an entire bathroom can be freshened up for about $1,500 – a fraction of what a complete remodel would cost.
"Re-glazing doesn't create a dream bathroom, but it can make that porcelain tub look almost new."
And beyond …
According to Remodeling, a wood deck can return 87.4 percent of the average $9,539 up-front investment.
Lighting fixtures are another modest investment that can pay off handsomely – especially in the entryway and dining room. "Plus, you can exclude them in the sale price and take it with you to your next place," said Hart. "Or use them as a negotiating point."
Copyright © 2014 USA TODAY, Dave Swanson, Reviewed.com.
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