In his article, Paul Sullivan describes current trends in home renovations and the potential returns or unfortunate losses they may bring. He notes that oftentimes, renovations’ costs are not in line with their returns and may even reduce a home’s value. Sullivan explains,
Ms. Lautz said people who would like to recoup more of their investment would do better by aiming for boring. Putting in new insulation and garage doors or replacing a roof, siding or windows adds value and saves energy.
But new kitchens and bathrooms make owners happy, and their value is more difficult to discern.
According to the Realtors report, the average price of a kitchen renovation is $60,000 and carries a “joy score” of 9.8 out of 10. Yet, the report found, only 67 percent of the price is recovered when the owner sells the house. A bathroom renovation typically cost $26,000 and has a joy score of 9.3, but only 58 percent of that will be recovered.
Stan Humphries, chief economist for Zillow Group, said he found in his research that high-end bath and kitchen renovations were among the worst investments (though not as bad as finishing a basement).
On the other hand, he said, a “midrange bathroom remodel” could reap a big increase in value. These are renovations where a fairly bland bathroom is made into something “you’d bring your guests into,” he said. The return is $1.71 for every $1 spent.
Read the full article here: Renovations That Add Value to a Home: Think Shingles, Not Marble
Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal