To help determine how well various remodeling projects might hold their value, Remodeling magazine publishes a Cost vs. Value Report each year. The report details both national and regional average returns for many different remodeling projects. Following is a look at how five of the most popular projects fared in the most recent report, along with some guidelines for getting started on each project:
- Kitchen remodel
Traditionally, kitchens and bathrooms have been the two remodeling projects that have been most attractive to potential buyers and provided the highest ROI, and this trend continues to hold.
The average cost of a minor kitchen remodeling project nationwide is now $21,411, with 78 percent of this cost recouped upon resale. A major kitchen remodeling project, meanwhile, costs $57,215, but the ROI drops to 72 percent.
Kitchen remodeling projects usually include upgrading old appliances with sleek new energy-efficient models; replacing countertops (usually with granite or marble) and cabinets; adding tile backsplashes on the walls above counters, the sink and the stove; replacing fluorescent lights with recessed halogen lights; adding under-counter lighting; and replacing old sinks with ones that have larger, deeper basins and old faucets with new water-saving, high-tech ones.
- Bathroom remodel
This also continues to rank among the most attractive remodeling projects from an ROI perspective: A minor bathroom remodeling project now costs $16,142 and recoups 71 percent upon resale. Moving up to a major bathroom remodel increases the cost to $52,295 but lowers the ROI to just 63 percen
- New deck
There are few home improvement projects that deliver more enjoyment than a new deck, and decks also hold their value well when it comes to resale. The average wood deck now costs $10,634 to build, and homeowners recoup 81 percent of this when they sell. For a composite deck, the cost rises to $15,373 and the ROI drops to 71 percent.
You can save a lot of money on your new deck by building it yourself. Decks usually aren't as difficult or complicated as most other home improvement projects, making them good do-it-yourself projects for many "weekend warriors."
- Finished basement
There are many potential benefits to finishing a basement, not the least of which is the addition of hundreds of square feet of usable square footage to your home. This is also usually a good investment: The average basement remodel now costs $62,067 and returns 75 percent of the investment.
Unlike building a deck, finishing a basement is usually a large and complex project that goes beyond the skills of most homeowners–even those who consider themselves somewhat handy around the house. Unless you're experienced in carpentry and construction, or have a good friend who is, you're probably better off hiring a pro.
- Home office
With the growing number of Americans working from home, adding a home office has become one of the hottest home renovation projects. Unfortunately, home offices are among the lowest rated projects when it comes to ROI: The average home office renovation costs $28,375 and returns only 48 percent of the investment.