Basic maintenance, such as the roof and exterior painting, are frequently more important than an awesome kitchen.
According to Remodeling Magazine (http://www.remodeling.hw.net/) you’re less likely to recoup your investment in a major kitchen or bathroom remodel than you are to get back what you spend on basic home maintenance such as new siding. Siding replacement recouped 92.8 percent of its cost, according to the study. The only home improvement likely to return more at resale was a minor (roughly $15,000) kitchen remodel, which returned 92.9 percent. Replacing roofs and windows were also high on the list, returning 80 percent or more at resale.
If you’re thinking about sinking some money into home improvement projects this year, keep a few things in mind. What you’ll get back on your investment depends on the value of your house, the value of houses in your immediate neighborhood, the housing market where you live, how soon you sell after making improvements, and the quality of the project itself.
Kitchens and Baths
In the hottest housing markets, springing for a kitchen or bath remodel is a sure-fire investment, often returning more than 100 percent of the cost. In Baltimore, for instance, a $9,400 bathroom remodel recouped 182 percent of its cost at resale, according to Remodeling’s 2004 study. The markets in Washington, D.C., Minneapolis, Chicago, Atlanta, San Francisco and San Diego also offered triple-digit returns on a bathroom remodel. Minor kitchen remodels (average cost: $15,273) also provided returns of more than 100 percent in cities including Providence, R.I., Miami, New Orleans and, of course, San Diego, where a $17,928 investment netted $27,000 on resale.
Most buyers have a limit on what they can spend for a house. If they know they don’t have to spend money on the upkeep of basic systems, then they’re more likely to buy the house and consider upgrading the kitchen or baths themselves. More than 70 percent of buyers who purchased existing homes knew what they were going to remodel before they even closed on the deal, according to HanleyWood’s Housing Continuum Study, conducted in 2002 in conjunction with Harvard’s Joint Center for Housing Studies. The same study showed that 30 to 40 percent of buyers of existing homes made home improvements within six months after purchase.
The importance of different maintenance issues varies with geographical location, too. Roof replacement (average cost: $11,376) was very important to buyers in the east, according to Remodeling, where homeowners recouped an average 96.3 percent of the cost. In the Midwest, the average return for the same improvement was just 71.1 percent.
Curb appeal is a major reason that siding replacement ranks so highly on the Cost vs. Value report. Replacement siding also offers the added value of being low maintenance, an important issue for cost-conscious buyers.