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Which Home Remodels Pay Off?
By JLP | September 14, 2006
My friend Tonya Harp is a real estate agent in the Arlington, Texas area. She sent me some interesting information about which home remodels pay off. Here’s a breakdown of their numbers:
|
Remodeling |
Average |
% of Cost |
Dollar Amount |
|
Attic Bedroom |
$35,100 |
77 – 157% |
$27,027 – $55,107 |
|
Master Suite |
$70,500 |
71 – 131% |
$50,055 – $92,355 |
|
Family Room Addition |
$53,200 |
74 – 137% |
$39,368 – $72,884 |
|
Minor Kitchen Remodel |
$16,900 |
100 – 111% |
$16,900 – $18,759 |
|
Major Kitchen Remodel |
$41,500 |
97 – 108% |
$40,255 – $44,820 |
|
Bathroom Addition |
$16,200 |
82 – 89% |
$13,284 – $14,418 |
|
Two-Story Addition |
$75,000 |
81 – 87% |
$60,750 – $65,250 |
|
Home Office |
$11,500 |
67 – 81% |
$7,705 – $9,315 |
|
Bathroom Remodel |
$10,000 |
61 – 79% |
$6,100 – $7,900 |
|
Basement Finishing |
$44,500 |
54 – 64% |
$25,365 – $28,480 |
The printout (sorry, there’s no web link) has the following small print under their table:
Figures represent the cities of San Diego and Philadelphia. Nationally, minor kitchen remodels returned highest percentage; home offices least. Numberous variables affect return: region and city; activity in real estate market, quality and age of the remodel, etc. View complete charts at www.Remodeling.hw.net.
I understand that San Diego and Philadelphia doesn’t exactly make a representative sample. However, it can at least give a place to start from. Oh, and just because a particular remodel won’t recoup all of your costs, does not necessarily make it a bad thing. If you plan on staying in your house for a long time and can afford to do the project, go for it. It’s nice to be able to enjoy the house you live in.
Finally, just to help get the word out about my friend Tonya, if you are looking to buy or sell a home in the Arlington, TX area, give Tonya a call.
Topics: Housing Market | 4 Comments »
September 14th, 2006 at 12:10 pm
Though encouraging when considering a remodel, I think that these numbers could lead to rationalization about spending more than you should. You only realize those returns if you sell your home or investment property, and in the meantime that money not reducing your debt burden or working for you in investment accounts.
I think the best reason to do a remodel is that it makes your home or investment property more liveable. If you already have a great attic bedroom, you aren’t going to recoup 157% of the cost of remodeling it, whereas if your bathroom hasn’t seen new fixtures since the 70s, a remodel might be worth more than 79% of its cost…
September 14th, 2006 at 2:43 pm
Personal Finance Advice did a nice article on this a while back. The results were focused on several major cities but the returns were far higher than in Arlington.
Those seem like awefully low returns, were those for a specified time period? Because it would see to me that the return over time would be much better.
November 12th, 2006 at 11:10 am
we are winding up a minor remodel of our master bath….while I was careful not to do anything that may be considered an “overimprovement”, we still spent about 16k. We are confident that we will recoup at least 100%+ of this cost in additional equity(we live in South Palm Beach Cnty, FL)….not only that, but the joy of using the new bathroom you just cant place a $ figure on….getting up every morning to our “builders grade” eyesore was depressing….
May 22nd, 2007 at 7:00 pm
Looks like kitchens and bathrooms are a safe bet. We’re planning on doing both in the future. Thanks for the info.