How much will you actually recover for your remodeling dollars spent?
Updating and remodeling kitchens and baths add the most value to a home. In some markets, remodeling projects will return more than 100 percent of the cost if the home is sold within a year; if the home is kept longer than one year, returns can be even more.
Here are some interesting points given on several studies on homeownership and remodeling:
Ten percent of homeowners spend more than $5,000 a year on remodeling
Within two years of having a child, more than 75 percent of home owners remodel or build onto their existing home.
Those who move into homes at least 15 years old are more likely to start remodeling immediately.
So, why remodel?
Remodeling helps preserve the asset by shoring up its value while enabling families to adapt their homes to personalized styles, updated building codes and safety standards and to reflect changing household needs. Also, in some areas where housing costs have risen dramatically, its more affordable to remodel than to buy another home.
Here are some recommendations to help you when choosing a contractor or having to deal with problems in your remodeling project:
Screen contractors referred to you by friends, families, co-workers and others you trust.
Get at least three written estimates.
Question unusually high or low bids.
Make sure the quality of materials and amount of work matches in all bids.
Hire only licensed, bonded contractors. Verify that the contractor carries valid and sufficient insurance, worker's compensation and liability insurance.
Check the contractor's license status with the appropriate licensing board, before signing on the dotted line.
Check references. Call or arrange to visit another recently-remodeled job (if possible), or talk with several customers and ask lots of questions.
Put all the details of your agreement in a written contract, including any changes made during construction. Leave no blanks unfilled.
Require lien releases from all sub-contractors, vendors and suppliers and make sure they've been paid in full by the general contractor before you make a final payment to the general contractor.
Investment Return Estimates
Please use this list as a general ball-park estimate on investment returns for remodeling projects done. Prices and costs vary depending upon location, materials used and other factors. Please consult your contractor and real estate professional for accurate pricing and recoup estimates.
MINOR KITCHEN REMODEL (replace cabinet doors, oven and cooktop, laminate countertops, sink, faucet and floor, repaint): Job Cost: $8,507; Resale Value: $8,030; Cost Recouped: 94%
BATHROOM ADDITION (add a second bath to a house with 1 or 1.5 baths; include ceramic tile and linen closet): Job Cost: $11,645; Resale Value: $10,593; Cost Recouped: 93%
MAJOR KITCHEN REMODEL (redesign kitchen, replacing all of the above, plus built-in microwave, custom lighting, island): Job Cost: $21,262; Resale Value: $19,190; Cost Recouped: 90%
MASTER SUITE (in a house with 2-3 bedrooms, add a 24-by-16 master suite with walk-in closet, whirlpool tub, separate shower): Job Cost: $36,472; Resale Value: $30,350; Cost Recouped: 84%
ATTIC BEDROOM (in a 2-3 bedroom house, convert unfinished attic space with bedroom and shower/bath): Job Cost: $22,840; Resale Value: $19,084; Cost Recouped: 84%
TWO-STORY ADDITION (first-floor family room and second-floor bedroom with full bath): Job Cost: $55,687; Resale Value: $46,236; Cost Recouped: 83%
FAMILY ROOM ADDITION (add a 16-by-25 room with skylights, hardwood tongue-and-groove floor, fireplace): Job Cost: $31,846; Resale Value: $26,483; Cost Recouped: 83%
BATHROOM REMODEL (update existing bath with new tub, toilet, vanity, medicine cabinet, lighting, tile): Job Cost: $8,423; Resale Value: $6,480; Cost Recouped: 77%
REPLACE WINDOWS (10 new 3-by-5 aluminum-clad windows with trim): Job Cost: $6,112; Resale Value: $4,536; Cost Recouped: 74%
REPLACE SIDING (1,250 square feet of new vinyl or aluminum siding and trim): Job Cost: $5,458; Resale Value: $3,983; Cost Recouped: 73%
DECK ADDITION (16-by-20 deck of pressure-treated pine, including built-in bench, railings, and planter): Job Cost: $6,172; Resale Value: $4,459; Cost Recouped: 72%
H OME OFFICE (convert existing room into office with custom cabinetry and rewiring for electronic equipment): Job Cost: $8,103; Resale Value: $5,423; Cost Recouped: 67%
