Which Home Improvements Pay Off?
Basic maintenance, such as the roof and exterior painting, are frequently more important than an awesome kitchen.
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Even in hot housing markets, the old saw holds true: "If people drive by your home and are not impressed they're not going to walk inside," says Dick Gaylord, who has sold real estate for 27 years.
"If I were going to spend money on a property, I would really work on making sure the curb appeal is strong," says realtor Ron Phipps. Phipps suggests adding a front porch to create interest to the exterior of a flat house, for instance. "You really want to convey a sense of welcome," he says. "If all your remodeling is on the inside but the outside of the house is challenging, you'll never have a chance to even show the inside."
Curb appeal is a major reason that siding replacement ranks so highly on the Cost vs. Value report, says editor Sal Alfano. Replacement siding also offers the added value of being low maintenance, an important issue for cost-conscious buyers.
Adding a room or two or five can be a good investment, particularly if you live in a hot housing market. "In the last couple of years there have been a lot of requests for additions," says general contractor Don Sever, who's based in the red-hot northern Virginia market. "Everything from adding a sunroom to doubling the size of the house." Much of the demand is driven by homeowners who want more space, but then realize they can't afford larger homes in their own neighborhood. Sever met with clients last year who wanted to fix up their house to put it on the market. After looking for homes to buy, "they decided that instead of spending money to get it ready to sell, they'd add features to make the house more livable and stay put."
Every 1,000 square feet added to a home boosts the sale price by more than 30 percent, according to the 2005 study for the National Association of Realtors.
Bathroom additions return the most, according to Remodeling magazine's report — an average of 86.4 percent. The addition of attic bedrooms, family rooms and sunrooms returned anywhere from 70 to more than 80 percent of the money spent — and that doesn't factor in the value of your own enjoyment of all that new space.
And more and more people want dedicated rooms for hobbies and crafts, says editor Sal Alfano, whether it's an exercise room, knitting room or home office.
One caveat: Don't add on so much that you price your house right out of the neighborhood. "You don't want to be the leading value for the neighborhood," warns realtor Phipps. "Although you can be at the upper end."
Bells and Whistles
For some homeowners, home improvement isn't about return on investment; it's simply about making dreams come true. Architect Steve Straughan recently finished work on a $250,000 home theater room with a 12-foot wide screen and an elaborate sound system. "There's not a home we're doing that doesn't have a home theater," Straughan says. "It's a common request across the board and typically it's a big investment." Most home theaters involve wiring speakers into walls and extensive built-in cabinetry, as well as soundproofing–"it's not something you can take with you" if you move, Straughan points out. Still, a home theater is likely to have broad appeal, so you may recoup a large chunk of your costs at resale. "A home theater makes sense," says realtor Ron Phipps. "A six-car garage does not make sense." In the high-end L.A. market, Straughan also sees demand for wine cellars, massage rooms and yoga rooms.
Are you one of the millions of Americans considering a remodeling project this year? If you are, then you probably have at...