Many sellers ask me what they can do to improve the value of their homes at resale. Every year, Remodeling Magazine and Realtor Magazine cooperate to research the costs and value-added of numerous home improvement projects in a wide range of costs. The research is conducted at the national, regional, and even the city/local level. This year, the information was compiled in the Remodeling 2014 Cost vs. Value Report (www.costvsvalue.com).
What I am going to summarize here is the information specifically for the Denver metro area. The average cost and the average amount recouped for each project can vary greatly depending on the area of the country that you are in. If you live outside the Denver area, you should go to www.costvsvalue.com to search for the information for your specific area of interest.
Although, for copyright reasons, I cannot list all of the projects here in this blog post, I can say that my overall observation of all the projects is that, with a few exceptions, most projects with “upscale” finishes do not recoup as much of their cost as projects done with mid-range finishes. So, my advice for sellers would be that you should view any luxury finishes as a “value-added” or “personal enjoyment” factor for yourself while you are living in the home. You most likely will not get back what you spent when it comes time to sell. While you should recoup a higher actual dollar amount for a high-end project versus a mid-range project, it may not be as high a return when stated as a percentage of the cost of the project.
The Five Projects in Denver that have the highest amount of cost recouped are:
|Project||Cost||Resale Value||Percentage of Cost Recouped|
|Upscale Siding replacement (fiber-cement)||$13,250||$13,560||102.3%|
|Mid-range Attic Bedroom Remodel||$48,664||$46,253||95.0%|
|Mid-range 2-story Addition||$153,017||$136,713||89.3%|
|Upscale Garage Door Replacement||$2,793||$2,479||88.8%|
|Upscale Siding Replacement (foam-backed vinyl)||$14,028||$12,358||88.1%|
My thoughts, looking at these top 5 projects for Denver, are that the type of work that recoups the most money can be categorized as upscale projects that improve curb appeal and/or midrange projects that add additional living space. Something to keep in mind, is that the report is based on AVERAGE costs and values for each project. Your costs and values may be different depending on how well you shop and the neighborhood you are in. If you wish to recoup as much as possible for your improvements, my advice would be:
- do the improvements that are valued by the buyers in your area,
- only improve to the level of expectation of buyers for your neighborhood (don’t over-improve),
- shop carefully to reduce the cost of the improvements made.
SOURCES: 1. ©2014 Hanley Wood, LLC. Complete data from the Remodeling 2014 Cost Vs. Value Report can be downloaded free at www.costvsvalue.com. 2. National Association of Realtors (http://www.realtor.org/news-releases/2014/01/realtors-rate-exterior-replacement-projects-among-most-valuable-home-improvements. 3. Photo copyrighted by Microsoft.
Additional information that may be of interest can be found at these sites:
If you would like a free consultation about the current value of your home, or suggestions for improving the marketability and resale value of your home, please feel free to contact Joan, by either calling 720-201-3049 or submitting the form below.