Renovating a home can be a complicated process, and it leaves little time to do the math on how the improvements you want to do today will pay off when you sell the home in the future. The “Remodeling 2016 Cost vs. Value Report” produced by Remodeling magazine looks at the costs of various remodeling jobs and the estimated value each project would add if the home were sold within a year.
If you’re considering a home remodeling project such as a kitchen or bathroom renovation, you’ll want to review the report to help you make the best decisions before you begin any new home improvement projects.
Nationally, home sellers would recover an estimated 64.2 percent of home renovation costs if they sell the house within a year of the remodel, according to the report.
In the Philadelphia metropolitan area, an upscale bathroom remodel returned 55 percent of the investment, and a major kitchen remodel returned 59.6 percent of the project cost, the report said. In general, replacement projects – replacing windows, doors or garage doors – recouped the highest percentage of cost.
The annual report lists the estimated costs of 27 different mid-range and upscale home remodeling and replacement projects. Although the costs of home remodeling projects differ because each one is as unique as each homeowner, the report can provide useful comparisons for both homeowners and remodeling contractors.
The report’s findings indicate that now is a good time for homeowners to launch a new home improvement project to recoup the most value from the work. The report attributed the increased value of renovations to the recovery of the housing market. In particular, the report noted that the value of renovations ordinarily increases with economic growth.
The Full Value of Renovation
Certain types of renovation projects yield a lower return than others, but keep in mind that utility is an important consideration. Homebuyers purchase new homes for their families to enjoy. Hard numbers fail to adequately describe the total qualitative value realized through a home renovation project. In addition to receiving a financial return, if you complete a renovation project, you can enjoy the benefits of an improved residence for decades to come. Consider both home value increases and personal benefits when contemplating a renovation project.