You’re scanning through the latest house design magazine with the idea of updating your kitchen. The impression is that if you remodel that outdated room full of avocado green appliances (What were you thinking?) from the bankrupt department store, you could make a tidy sum upon resale. That may not always be true. According to a story on the home website, The Spruce (Cost vs. Value, Wallender, Lee, May 5, 2017), the average cost is hard to wrangle as it depends on the project size and scope.
In January 2017, Remodeling Magazine (Caruso, Nick, Cost vs. Value, Jan. 16, 2017) issued their annual story on the return on investment regarding 24 different projects. Tracking the rise and fall of these particular changes to a home over a six-year period, netted a small change of 64.3 cents to the dollar. Meaning, that for every dollar spent to upgrade, there was a more than a quarter of a dollar loss. Therefore the perceived value may not be the actual cost.
Strangely, it's all about the curb appeal. The three projects with the greatest ROI in the "upscale" area are on the exterior of the home:
Garage Door Replacement (85.0% ROI)
Average Cost: $3,304
Average Resale Value: $2,810
Entry Door Replacement (fiberglass) (77.8% ROI)
Average Cost: $3,276
Average Resale Value: $2,550
Window Replacement (vinyl) (73.9% ROI)
Average Cost: $15,282
Average Resale Value: $11,286
At the other end of the spectrum are projects with the lowest returns on investment—improvements not in demand by the market. In comparison, while everything is about “curb appeal,” it’s the opposite for the interior additions or upgrades.
The three projects with the lowest ROI in the “upscale” cost category are:
Major Kitchen Remodel (61.9% ROI)
Average Cost: $122,991
Average Resale Value: $76,149
Master Suite Addition (59.9% ROI)
Average Cost: $250,687
Average Resale Value: $150,140
Bathroom Remodel (59.1% ROI)
Average Cost: $59,979
Average Resale Value: $35,456
The 2017 Cost vs. Value Report compares, across 99 markets, the average cost of 29 popular remodeling projects with their average value at resale one year later. Average resale value is calculated based on estimates provided by real estate professionals. View the full report, including project descriptions and city-level data, here.