Remodeling Pays Off
People are putting money into their homes again now that values are rising. Of course the declining values didn’t stop remodeling, as owners without equity decided to stay put and improve rather than do a short sale. In any event, owners can significantly recoup their costs if they do certain remodels now and sell later, according to the National Association of Realtors (NAR) Remodeling “Cost vs. Value Report”.
The Cost vs. Value Report for 2013 contains statistics on the estimated amount the cost of certain midrange and high end remodeling projects will be recouped upon a future sale. The cost data is produced by a computer program, with the resale figures provided by Phoenix area Realtors. According to the Report, it appears that homeowners will do well if they do decide to make certain improvements.
As has been shown in past Reports, upgrading kitchens and bathrooms are a smart bet. The percent of cost recouped in Arizona on a major kitchen remodel is about 82%, and a minor one is 94%. A bathroom remodel will recoup around 88%. These numbers are significantly up from those of the Great Depression years, and have returned to historical norms.
The project with the biggest return on investment on average was the replacement of an entry door. The cost recouped over the years has ranged from more than cost to just under it. For 2013 a fiberglass door is estimated at 81%, but a steel door will recoup an estimated 98% of its cost upon resale. Replacing a door is also the least expensive item project, proving again that it is worth every penny to make a buyer’s first impression a good one.
In order, the steel entry door replacement was number 1, a midrange minor kitchen remodel was number 2, and third on the most bang for the buck list is the replacement of midrange wood framed windows, at around a 90% recovery rate (almost 82% for upscale).
Other valuable home improvement projects include the replacement of a midrange garage door at almost 89%, and for upscale homes, a grand entrance at 79%.
No matter what percentage is recouped, kitchen and bathroom remodels tend to be the best choice. Since these are the two most important areas to most buyers, remodeling these areas should result the quickest sale possible.
Additional project data is available in the midrange and upscale types, with the job cost and estimated resale value given for each item in those categories. If you to see all the data, you can read the whole report at www.realtor.org. We can also help you with remodeling and pre-sale renovations. Give us a call before you start work at 480 675 0112.
– N. Mark Kramoltz © 2015