Remodeling Costs & Return on Investment
How much does remodeling cost? Will I recoup my investment if I sell the house?
Great question!! Each year Remodeling Magazine published it’s “Cost vs. Value Report” that compiles the average cost of remodeling and the average cost of the return on it’s investment across the nation.
Cost data for the report come from HomeTech Information Systems, a remodeling estimating software company in Bethesda, Md. HomeTech collects current cost information quarterly from a nationwide network of remodeling contractors and employs an adjustment factor to account for regional pricing variations. Construction cost figures include labor, material, sub-trades, and contractor overhead and profit.
Resale values (“cost recouped” in the tables) are aggregated from estimates provided by National Association of REALTORS® members. E-mail surveys containing construction costs and median home price data for each city were sent to more than 20,000 appraisers, brokers, and salespeople, yielding data from more than 1,600 respondents (an 8 percent response rate).
Since 2002 four projects, reported each year since 2002, have shown the greatest return at resale on a national basis. Two of the projects, siding and windows, reflect the importance consumers place on curb appeal and insulation; the others, a kitchen and a bath project, are consistently high performers in most markets.
Remodeling Magazine reports the following from their national 2005 Annual Cost vs. Value Report: (Note, every project will vary by selected materials, location, pre-existing conditions, and size, and these numbers are simply averages for the specs listed).
Midrange Bathroom Remodel Project Description: Update an existing 5-by-7-foot bathroom that’s at least 25 years old. Replace all fixtures to include 30-by-60-inch porcelain-on-steel tub with 4-by-4 ceramic tile surround, new single-lever temperature and pressure-balanced shower control, standard white toilet, solid surface vanity counter with integral double sink, recessed medicine cabinet with light, ceramic tile floor, and vinyl wallpaper.
| Midrange Bathroom Remodel | |||
|---|---|---|---|
| Job Cost | Resale Value | Cost Recouped | |
| National Average: | $10,499 | $10,727 | 102.2% |
| East Average: | $10,978 | $11,466 | 104.4% |
| Midwest Average: | $11,047 | $9,885 | 89.5% |
| South Average: | $9,293 | $9,596 | 103.3% |
| West Average: | $11,025 | $12,340 | 111.9% |
Upscale Bathroom Remodel Project Description: Expand an existing 5-by-7-foot bathroom to 9 by 9 feet within existing house footprint. Add another window, bringing total glazing area to 30 square feet. Relocate and replace tub with custom 4-by-6-foot dual shower with top-of-line fittings and full-body-wash shower wall, tile, glass block surround, and glass door. Relocate and replace toilet. Add bidet. Add medium-range stone tops in custom vanity cabinet with twin designer undermount sinks and polished nickel faucets. Add linen/towel storage closet. Include ceramic tile floor, papered walls, and hardwood trim. Add general and spot lighting and a humidistat-controlled exhaust fan.
| Upscale Bathroom Remodel | |||
|---|---|---|---|
| Job Cost | Resale Value | Cost Recouped | |
| National Average: | $26,052 | $24,286 | 93.2% |
| East Average: | $26,950 | $26,211 | 97.3% |
| Midwest Average: | $27,423 | $21,379 | 78.0% |
| South Average: | $23,428 | $23,087 | 98.5% |
| West Average: | $27,172 | $26,778 | 98.5% |
Minor Kitchen Remodel Project Description: In a functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace fronts with new raised-panel wood doors and drawers. Replace wall oven and cooktop with new energy-efficient models. Replace laminate countertops. Install midpriced sink and faucet. Repaint trim, add wall covering, and replace existing flooring with resilient flooring.
| Minor Kitchen Remodel | |||
|---|---|---|---|
| Job Cost | Resale Value | Cost Recouped | |
| National Average: | $14,913 | $14,691 | 98.5% |
| East Average: | $15,172 | $15,316 | 100.9% |
| Midwest Average: | $15,426 | $13,151 | 85.3% |
| South Average: | $13,998 | $13,498 | 96.4% |
| West Average: | $15,328 | $17,209 | 112.3% |
Midrange Major Kitchen Remodel Project Description: Update an outmoded 200-square-foot kitchen with design and installation of a functional layout of 30 linear feet of semicustom-grade wood cabinets, including a 3-by-5-foot island, laminate countertops, and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system; built-in microwave, dishwasher, garbage disposal; and custom lighting. Add resilient flooring. Finish with painted walls, trim, and ceiling.
| Mid-Range Major Kitchen Remodel | |||
|---|---|---|---|
| Job Cost | Resale Value | Cost Recouped | |
| National Average: | $43,862 | $39,920 | 91.0% |
| East Average: | $44,659 | $42,490 | 95.1% |
| Midwest Average: | $45,237 | $36,691 | 81.1% |
| South Average: | $41,133 | $36,329 | 88.3% |
| West Average: | $45,242 | $45,353 | 100.2% |
Upscale Major Kitchen Remodel Project Description: Update outmoded 200-square-foot kitchen with 30 linear feet of top-of-the-line custom cherry cabinets with built-in sliding shelves and other interior accessories. Include stone countertops with imported ceramic or glass tile back splash; built-in refrigerator, cooktop, and 36-inch commercial grade range and vent hood; and built-in warming drawer, trash compactor, and combination microwave and convection oven. Install high-end undermount sink with designer faucets and built-in water filtration system. Add general and task lighting, including low-voltage under-cabinet lights. Install cork flooring with cherry trim.
| Upscale Major Kitchen Remodel | |||
|---|---|---|---|
| Job Cost | Resale Value | Cost Recouped | |
| National Average: | $81,552 | $69,194 | 84.8% |
| East Average: | $82,528 | $70,718 | 85.7% |
| Midwest Average: | $83,333 | $64,586 | 77.5% |
| South Average: | $77,786 | $65,111 | 83.7% |
| West Average: | $83,720 | $77,812 | 92.9% |
Family Room Addition Project Description: In a style and location appropriate to the existing house, add a 16-by-25-foot room on a crawl space foundation with vinyl siding and fiberglass shingle roof. Include drywall interior with batting insulation, prefinished hardwood floor, and 180 square feet of glazing, including windows, atrium-style exterior doors, and two operable skylights. Tie into existing HVAC. Add electrical system to code, including 12 recessed ceiling lights.
| Family Room Addition | |||
|---|---|---|---|
| Job Cost | Resale Value | Cost Recouped | |
| National Average: | $54,773 | $45,458 | 83.0% |
| East Average: | $56,464 | $48,690 | 86.2% |
| Midwest Average: | $57,599 | $41,842 | 72.6% |
| South Average: | $48,778 | $40,239 | 82.5% |
| West Average: | $58,081 | $52,820 | 90.9% |
