Whether you’re dying to update your kitchen, add a half-bath, or kick back on a brand-new deck, it pays off big-time knowing just what kind of return on investment your dream renovation might deliver. Now that Spring is officially here, take a look at Remodeling magazine's annual Cost vs. Value report, which analyzes what you’ll pay for various upgrades—and how much you’ll recoup on that investment when you sell your home.
For this much-read report (which, by the way, is celebrating its 30th anniversary), researchers scrutinized 29 popular home improvements in 99 markets nationwide, polling contractors on how much they charge for these jobs as well as real estate agents on how much they think these features boost a home’s market price. From there, they divided each project’s upfront cost by the home’s resale value; the resulting percentage gives you a sense of how well each particular reno “investment” pays off.
So if you’re now sitting there scratching your head wondering which upgrades to make, take a step back and ask yourself this question first: How long do you plan to live in your home?
“If you see yourself keeping the house for at least five years, you shouldn’t worry about value at all,” Webb says. The reason: Housing trends and fads can change dramatically in this amount of time, so what’s hot today could be passé all too soon. So if you plan to stay put, renovate however will make you happy, period.
If, on the other hand, you’re planning to sell in less than five years, “then looking at the return makes sense,” says Webb. Just keep in mind that tastes vary widely by location, so it’s important to pinpoint what’s hot in your area (which is why Remodeling breaks down its data into nine U.S. regions). For instance, composite decks may be big in the Midwest, whereas the South is gaga over new garage doors. As Webb points out, “Every one of the 29 projects had at least one market where the payback was over 100%. So every project got love somewhere.”