How much will that remodeling project cost? The size of the check you write to a contractor might not be the best possible measure.
Assuming that you eventually sell your home, the number that matters most might be the price of the remodeling project minus the amount that the project boosts the home’s selling price. On average, home owners receive around two-thirds of their remodeling costs back when they sell, according to Remodeling Magazine’s 2019 Cost vs. Value Report—but some projects tend to provide a much higher return on investment than others.
Here are six projects that return 70% to 100% of the amount they cost, on average, and four projects that return a whole lot less…
Remodeling Projects That Nearly Pay for Themselves
Real estate agents often stress that a home’s “curb appeal”—how nice it looks from the street—can have a significant impact on its sales price. The remodeling report suggests that they’re right—projects that improve the exterior appearance of a home dominate the top of the list, and one interior project continues to provide an appealing return…
New garage door. Average cost recouped: 97.5%. The garage door often is the easiest, most cost-effective way to upgrade a home’s exterior appearance. Garage doors are large enough that they’re a significant percentage of the front façade of many homes. Existing garage doors often are badly degraded from the weather, and many are dented as well, but a replacement is relatively affordable. An attractive steel door with foam insulation and windows costs around $3,600 on average.*
Manufactured stone veneer. Average cost recouped: 94.9%. Replace the lower third of your home’s siding on the street-facing façade with a stone veneer—an outer layer that creates the impression of a stone foundation—and you’re likely to recoup almost all of your expense when you sell, assuming that the veneer is in keeping with the style of the home. (A real stone veneer also is an option, but prices tend to be higher and the appearance is similar.)
This type of upgrade gives a home a sense of weight and solidity, and most people like the mix of textures and colors it creates with the siding above. Stone veneers first became popular in the Midwest but now are catching on in other parts of the country as well. Warning: If a stone veneer is not installed properly, it can create moisture problems for the home. Confirm that the contractor you hire will either apply an added layer of housewrap beneath the stone (most homes have just a single layer under the siding)…or better yet, install a drainable matrix, such as Masonry Technology Inc.’s Sure Cavity Rainscreen Drainage Plane. (A metal trim called a “weep screed” also should be installed at the base of the veneer to let moisture escape.) Average price: Around $9,000 for approximately 300 square feet.
Minor kitchen remodel. Average cost recouped: 80.5%. This is one interior project that offers a very solid return on investment. But take care—not every kitchen remodel will produce such an impressive return when the home is sold. You’ll want to control the scope and scale of the project, particularly if you expect to sell the home soon.
While a “minor” kitchen remodel—average cost $22,500—can return around 80% of the money spent, an “upscale major kitchen remodel” averaging more than $100,000 typically returns only 59.7%. Major remodels should be done only when you plan to stay in the home for many years so that you can enjoy the remodel.
A minor face-lift often is sufficient to dramatically improve the look of an older kitchen. Cost-effective improvements include replacing old appliances, countertops, flooring, sinks/faucets and cabinet door and drawer fronts, plus repainting walls, trim and ceiling. Farmhouse-esque shaker-style cabinet doors and drawer fronts are a good choice—they’re timeless and popular with home buyers.
If your goal is to recoup as much as possible of your remodeling costs when you sell, do not change the layout of the kitchen, replace cabinets entirely or purchase luxury-brand appliances or expensive countertops.
Wood deck addition. Average cost recouped: 75.6%. Home buyers tend to like decks—they imagine spending pleasant afternoons outside enjoying sunny summer days. Note that it’s pressure-treated wood decks, not composite decks, that are listed here. Composite decks last longer and require less maintenance, so they can be a great choice if you intend to remain in the home for many years to come…but if you expect to sell in the not-too-distant future, the higher cost of composite decks leads to a somewhat lower return on the investment—just 69.1%. Prices vary, but based on nationwide averages a 16-foot-by-20-foot composite deck might cost $19,200, versus $13,300 for a wood deck of the same size.
New siding. Average cost recouped: 75.6%. These days there are durable, affordable vinyl- and fiber-cement- siding options that hold up well to the weather and very effectively mimic the look of wood. The average cost of siding replacement is around $16,000 for 1,250 square feet, and as noted above, the average payback is a relatively strong 75.6%. But payback of this project can vary significantly—much depends on how badly the current siding needs to be replaced.
New entry door. Average cost recouped: 74.9%. A new front door—like a new garage door—is an inexpensive way to help a home make a great first impression. An insulated 20-gauge steel door that is factory finished with paint is an attractive but cost-effective option. The total price of the project averages only around $1,800, even when the jambs and threshold are replaced in addition to the door itself. Wood doors might look even nicer, but they are difficult to maintain and cost more. Similar: For a more substantial front-door upgrade, have a prefabricated “grand entryway” installed. These typically feature a fiberglass door stained to look like wood and include “sidelights”—tall vertical windows on each side of the door, as well as a transom window above the door. Replace the door hardware including the lockset, too. Cost is around $9,000, but home owners typically recoup 71.9% of that when they sell.
Projects with Lower Payback
Home owners tend to recoup a low percentage of the cost of remodeling projects when they pay big bucks for upscale work. Future home buyers inevitably appreciate the upscale aspects of the home—they just don’t want to pay the premium to cover the high costs of the work.
Four projects where home sellers tend to recoup less than 60% of the cost of the project when they sell…
Upscale master bedroom suite addition. Average cost recouped: 50.4%. Upscale master bedroom suites might include fireplaces, walk-in dressing areas with natural light, spacious bathrooms with walk-in showers and soaker tubs—but the costs often climb upward of $200,000, and there’s a good chance that you’ll lose nearly half that money when you sell. Even a more modest “midrange” master suite addition has a relatively modest payback of 59.4%.
Backyard patio. Average cost recouped: 55.2%. Why do patios offer a poor return while wood decks do much better? The reason isn’t that home buyers don’t value patios…it’s that they don’t value them enough to make up for the fact that professionally installed stone patios tend to be much pricier than decks. The average bill for a 20-foot-by-20-foot patio is nearly $57,000.
Upscale bathroom addition. Average cost recouped: 58.1%. Adding a luxurious, high-end bathroom to a home will boost its eventual selling price—just not nearly enough to cover the steep cost of these projects, which average $87,700. The payback for a more modest midrange bathroom addition is only slightly better in percentage terms—60.6%.
Upscale major kitchen remodel. Average cost recouped: 59.7%. As mentioned earlier, dropping six figures on the kitchen of your dreams isn’t likely to pay off when you sell. Potential buyers who value high-end kitchens typically prefer to make their own appliance and styling choices, which might differ from your choices.
*Project costs provided in this article are national averages. Home owners’ actual costs could vary significantly based on the quality of the products and contractors selected…the part of the country…and other details about the home and project. The costs include both parts and labor.
