Each year we look forward to the publication of REMODELING Magazine’s “Cost vs. Value Report” and to reviewing industry trends both nationally and within our geographic region — the Mid-Atlantic region. One of the most significant changes in the 2013 report is that the expected return on investment (ROI), which measures the difference between average construction cost estimates and estimated resale value, increased for almost all projects.
The six remodeling projects that provide the greatest return on investment this year are replacement projects and ranked as follows:
- Entry door replacement (steel): (83% ROI)
- Fiber cement siding replacement: (74% ROI)
- Midrange garage door replacement: (71% ROI)
- Upscale garage door replacement: (70% ROI)
- Midrange vinyl siding replacement: (70% ROI)
- Upscale foam-backed vinyl siding replacement: (70% ROI)
Other popular remodeling projects that had a significant increase in ROI for 2013 compared to the 2012 Cost vs. Value Report, include:
- Deck additions: the return on a midrange composite deck addition increased from 58 to 61 percent, from 50 to 53 percent for an upscale composite deck addition, and from 65 to 69 percent on a wood deck addition.
- Two-story additions: ROI for a two-story addition that adds a family room to the first floor and a bedroom and full bathroom to the second floor, increased from 59 to 61 percent.
- Replacement windows: the ROI increased from 58 to 62 percent for upscale wood windows and from 61 to 64 percent for upscale vinyl windows, for midrange wood windows the ROI increased from 61 to 66 percent and from 63 to 64 percent for midrange vinyl windows.
- Bathroom addition: the return on an upscale bathroom addition increased from 46 percent in 2012 to 49 percent this year.
While the report gives consumers a good idea about project costs, always consider these three questions when planning a remodeling project:
What do I gain by remodeling? Many people remodel to enrich their lifestyle and enjoy their home. To them, this is the true return on investment in their home.
How long do I plan to own this property? If you're planning to live in your home for less than five years, take on remodeling projects that freshen up the inside of the home and promote curb appeal.
How does the value of my home compare to other properties in the area? Generally, a remodeling project that is less than 20 percent of the average resale value in your area can be recouped when your home is sold.
The tables below compare remodeling costs to resale values for midrange and upscale remodeling projects in the Middle Atlantic region, which includes New York, New Jersey and Pennsylvania. According to REMODELING Magazine's report, different remodeling projects offer a wide range of payback. For 2013, ROI (shown in the tables below as the % of Cost Recouped at resale) increased for almost all projects. Both tables list projects ranked by the greatest percentage of payback.
(TOP 10 ROI PROJECTS SHOWN IN BLUE)
|Midrange Project||Avg. Cost||Resale Value||% Cost Recouped|
|Entry Door Replacement (Steel)||$1,166||$967||83|
|Garage Door Replacement||$1,547||$1,104||71|
|Siding Replacement (Vinyl)
|Deck Addition (Wood)
|Minor Kitchen Remodel||$19,400||$12,843||66|
|Attic Bedroom Addition
|Replacement Windows (Wood)
|Replacement Windows (Vinyl)
|Major Kitchen Remodel||$56,199||$34,725||62|
|Deck Addition (Composite)||$15,584||$9,557||61|
|Entry Door Replacement (Fiberglass)||$2,798||$1,715||61|
|Master Suite Addition||$108,536||$62,696||58|
|Family Room Addition||$84,224||$46,943||56|
|Backup Power Generator||$11,825||$5,624||48|
|Home Office Remodel||$28,698||$11,035||38|
|Upscale Project||Avg. Cost||Resale Value||% Cost Recouped|
|Siding Replacement (Fiber Cement)
|Garage Door Replacement
|Siding Replacement (Foam-Backed Vinyl)||$14,456||$10,052||70|
|Replacement Windows (Vinyl)
|Replacement Windows (Wood)||$16,757||$10,458||62|
|Grand Entrance (Fiberglass)||$7,214||$4,200||58|
|Major Kitchen Remodel||$110,792||$59,346||54|
|Deck Addition (Composite)||$36,036||$18,985||53|
|Master Suite Addition||$230,013||$106,851||46|
NOTE: Estimates for project costs and resale values were developed by a Research Team for REMODELING Magazine. The value you can expect to recoup at resale from your remodeling project is contingent on what the contractor brings to the table. Price quotes will vary so it is important to consider a contractor’s experience and the materials that will be used for the project. In selecting a contractor, review the portfolio of the contractor’s work and ask to visit projects the contractor has completed.