Remodeling Cost vs Value
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Remodeling may be a labor of love for you, providing joy and satisfaction and improvements in living, but it’s also an investment that can seriously boost the value of your home. Only by how much?
Our goal is to enable you to make wise financial decisions when consider a remodeling project -- to decide the scope / extent of a project and even whether it makes sound financial sense to even start the project.
Remodeling.com's and the National Association of Realtors' (NAR's) Realtor.org publish annual reports that provide the numbers you need on how much it really costs for a pro to do a typical remodeling project, as well as how much that project can be expected to bring in resale value as a percenage (%) of cost.
They have looked at indoor and outdoor remodeling projects and found which ones are likely to add the most value to a home at resale.
Remodeling can be expensive, but a reputable remodeling company or REALTOR® can go a long way in helping you maximize your return on investment (ROI).
Different types of projects retain different levels of value at resale; some significantly more than others. Below is some interesting information about which remodeling projects get you the most bang for your buck.
|Table of Contents|
|Description of Reports||Published||Site*|
|Key Trends in the 2017 Cost vs. Value Report [with Chart of Cost-vs-Value by Year: 2003-2017]||2017||REM|
|Remodeling Impact - Cost vs. Value (Outdoor/Interior Remodeling Reports with Infographic Charts)||2015/16||NAR|
|10 Home Renovations Offering the Best (and Worst) Return on Investment||2016||REM|
|Remodeling Projects Cost vs. Value (National vs Chicago for example)||2015||IMP|
|Remodeling Cost vs Value by Region [also has links to reports for years: 2002-2014 and trends]||2014||TOT|
|Home Improvement Cost vs. Value Report [also has links to reports for later years: 2006 to 2014-15]||2004||RMG|
* Site Abbreviations Key: REM=Remodeling.com, NAR=Realtor.com, IMP=Improvement.net, TOT=Totalprotect.com, RMG=RealtorMag.com
For more answers to the following questions:
How much is too much?
Are there some improvements that don't increase value?
What's the Right Amount to Spend on Home Renovation?
What are the 5 Worst Home Improvements?
and other related renovation issues, see also the "Renovation Plan" section in our article: Flipping Properties
Key Trends in the 2017 Cost vs. Value Report
Remodeling.com's annual report provides the numbers you need on how much it really costs for a pro to do a typical remodeling project, as well as how much that project can be expected to bring in resale value. This year, things are looking up.
This is the 30th anniversary of when we first published Cost vs. Value, and our goal remains the same: to give you and your customers an unbiased, third-party report on how much it really costs for a professional to do a typical remodeling project, as well as how much a real estate pro believes that project will increase a home’s value if it’s sold within a year of when the work was completed. By dividing the project’s value into its cost, you and your customers get a sense of how much bang for the buck you’re generating as a result. For 2017, we have collected data on 29 projects in 99 markets nationwide. Here’s what we learned.>
To understand the 2017 Cost vs. Value Report, think “greige.”
For an independent analysis of Remodeling's Cost vs Value Report:
Should You Believe Remodeling's Cost Vs. Value Report?
Remodeling Impact - Cost vs. Value
When the dust settles, what are the benefits of a home improvement project?
Remodeling Impact Report: Outdoor Features
The 2016 Remodeling Impact Report: Outdoor Features analyzes 10 common outdoor remodeling projects and found which ones are likely to add the most value to a home at resale. The study by the National Association of REALTORS® (NAR) and National Association of Landscape Professionals (NALP) looked at at the reasons why home owners complete outdoor remodeling projects, the value of taking on such projects, and the increased happiness experienced by home owners once a project is completed.
The Remodeling Impact Report
The 2015 Remodeling Impact Report examines resale value and customer satisfaction of 12 interior and eight exterior projects. The study mines data and opinions from REALTORS®, consumers, and members of the National Association of the Remodeling Industry (NARI) to help explain the payoff of work ranging from minor upgrades to full-scale remodels.
Below are the corresponding infographics for the above 2016 and 2015 reports.
The 2015 infographics compares REALTORS®' expert opinions on the value of home improvement projects with the joy home owners report reaping from the efforts.
Click/tap on the images to jump to a corepage with full-size view.
10 Home Renovations Offering the Best (and Worst) Return on Investment
Remodeling may be a labor of love, but it’s also an investment that can seriously boost the value of your home. Only by how much? Well, according to Remodeling magazine’s 2016 Cost vs. Value Report, you’ll recoup an average of 64% of what you paid for a renovation if you sell your home this year.
To arrive at these figures, Remodeling asked consultants in various markets to estimate the average cost for 30 home improvement projects, from adding a bathroom to replacing a roof. Then, they asked real estate agents nationwide to estimate the expected resale value of these renovations so that readers could compare their out-of-pocket costs to how much money they’d get back when it came time to sell their home.
Remodeling Projects Cost vs. Value
Remodeling can be expensive, but a reputable remodeling company or realtor can go a long way in helping you maximize your return on investment.
Different types of projects retain different levels of value at resale; some significantly more than others. Below is some interesting information compiled by ImproveNet.com about which remodeling projects get you the most bang for your buck.
These numbers are taken from the national averages in 2015:
Note that Chicago compared favorable with the national statistics for this 5 categories and proves that the national average is just what it claims (an average) with some areas doing better and others doing worse at any given point in time.
Remodeling Cost vs Value by Region
Don't lose equity in the process!
This chart is based on a 2014 report by Remodeling Magazine:
Home Improvement Cost vs. Value Report
According to their annual Cost vs. Value report published at the end of 2004 by Realtor Magazine, remodeling of 25 year or older bathrooms received the highest percentage recoup of costs at time of sale (90.1%), followed by addition of a deck and then by window replacements.
For the top 10 improvements nationally and their average costs, see http://www.realtor.org/rmomag.NSF/pages/costvaluedec04b?OpenDocument
Note: Even though this is from 2004, we are including it, as it provides good summary descriptions of the remodeling work performed along with the cost and resale amounts and corresponding cost vs value (resale) ratio. While costs may not be exactly the same today, the percentage (%) ratio between cost and value should still hold for most of the enties. (See the Trends Chart above.)
See also see additonal NAR Cost vs Value reports for later years.
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