You may think an additional bedroom or a new pool would add thousands to the resale of your home, but that may not be the case. Sellers are often surprised they are unable to reclaim all the costs involved with remodeling their homes. Recouping your entire investment is ideal when you sell your house. But all home improvements are not equal at the time of resale. Consider that kitchen and bathroom remodels pay back about 90 percent or more of their costs. But finishing a basement usually pays back only a third. Other improvements are somewhere in between.
Here are some estimates of the costs you can expect to reclaim on typical home remodeling projects:
- New heating system: 100 percent
- New air conditioning system: 76 percent
- Minor kitchen remodel: 93 percent to 103 percent
- Major kitchen remodel: 91 percent
- Bathroom addition: 93 percent
- Family room addition: 85 percent
- Remodeled bathroom: 76 percent
- New fireplace: 75 percent
- Outdoor deck: 74 percent
- Home office: 70 percent
- New windows: 70 percent to 75 percent
- In-ground pool: 45 percent
- Upgraded landscaping: 32 percent to 62 percent
- Finished basement: 33 percent
Actual payback depends on the real estate market and current property values. If the pace of home sales has slowed, expect to see less payback than you would in a faster market. Also, consider the other homes in your neighborhood. If you remodel your house to twice the square-footage of your neighbor’s, you cannot realistically expect to sell at twice the price.
Sometimes smaller projects can pay back more than larger projects because of their more immediate visual improvement. These projects tend to be more cosmetic: fresh paint, flooring, moldings, new doors, window coverings, and ceiling fans.
You can always call me to discuss improving the resale value of your home.
