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Real estate
September 2008
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Advice for owners: Don't over-remodel
Remodeled kitchen
LOSING PROPOSITION   A major kitchen remodeling might return as little as 50 percent of its cost.
Homeowners can expect to get back less of the money they invest in renovations than they would have just a few years ago, according to a survey by Remodeling magazine. In 2005, 10 of 22 projects the magazine listed returned more than 90 cents on the dollar. In the past two years, no project did that well.

Remodeling’s annual survey polls thousands of real-estate professionals, mostly brokers and sales agents, to find out how much various projects are likely to return if the house is sold soon after the project is completed. (More detailed descriptions of the projects are available at costvalue.remodelingmagazine.com.)

For a second opinion, we conducted our own survey of real-estate appraisers around the country suggested by the Appraisal Institute, a professional association. They estimated how much homeowners were likely to recoup from the same remodeling projects over the same period. Our appraisers were sometimes more optimistic and other times more pessimistic than Remodeling’s respondents. Because the appraisers’ percentages differed by region, we show them here in a range. If you’re planning to remodel and sell anytime soon, it would probably be best to expect a return on the low side of the range.


What home sellers recoup from remodeling projects

Projects are listed here in alphabetical order.
Project Description National average cost Value recovered Appraisers' estimates
Attic-bedroom remodel Convert unfinished attic space to a 15x15-foot bedroom and a 5x7-foot bath with shower. Include four new windows and closet space under the eaves. Insulate and finish ceiling and walls. Carpet floor. $46,691 76.6% 50-75%
Backup power generator Install an electrical backup system able to provide 70 amps of power in two 240-volt circuits and six 120-volt circuits. Mount on 2x4-foot concrete or composite pad. Install an automatic transfer switch, load center, exterior disconnect, and grounding rod. 13,357 58 25-50
Basement remodel Add a 20x30-foot entertaining area with oak cabinets, wet bar, and a 5x8-foot full bath. 59,435 75.1 50-75
Bathroom addition Add a 6x8-foot bath over a crawl space. Include marble vanity top with molded sink, chrome faucets, fiberglass tub/shower with tile surround, white low-profile toilet, lighting, linen closet or cabinet, vinyl wallpaper, and ceramic tile floor. 37,202 66 50-85
Bathroom remodel In 5x7-foot bathroom, replace all fixtures, install 30x60-inch porcelain-on-steel tub with tile surround, standard white toilet, ceramic tile floor, vinyl wallpaper. 15,789 78.3 50-100
Deck addition Add a 16x20-foot pressure-treated wood deck, including stairs, railings, balusters, built-in bench, and planter. 10,347 85.4 30-100
Family-room addition Add a 16x25-foot room with vinyl siding and fiberglass shingle roof. Include hardwood floor, atrium-style exterior doors, windows, two skylights, and recessed ceiling lights. 78,989 68.6 50-75
Garage addition Construct a freestanding, two-car garage with foundation, asphalt shingles, and vinyl siding and trim. Install five vinyl windows, two electrically operated garage doors, fluorescent lighting, and two exterior spotlights. 53,897 69.5 70-75
Home-office remodel In a 12x12-foot room install custom cabinets, 20 feet of laminate desktop, computer workstation, and wall cabinet storage. Rewire the room for computer, fax, cable, and telephone lines. Install carpeting. 27,193 57 50
Kitchen remodel, major Update 200-square-foot kitchen with semicustom wood cabinets; laminate countertops; double-tub sink; energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, and custom lighting; and new flooring. 55,503 78.1 50-125
Kitchen remodel, minor Leave cabinets, but replace fronts and hardware. Replace wall oven and cooktop with energy-efficient models. Replace laminate countertops; install midpriced sink and faucet. Repaint trim, and install new resilient flooring. 21,185 83 60-125
Master-suite addition Add a 24x16-foot master-bedroom suite over a crawl space. Include walk-in closet/dressing area, whirlpool tub, separate 3x4-foot ceramic tile shower, and double-sink vanity. 98,863 69 40-75
Roof replacement Install fiberglass asphalt shingles with new felt underlayment, galvanized drip edge, and aluminum flashing. 18,042 67.4 50-100
Siding replacement Replace 1,250 square feet of existing siding with new foam-backed vinyl siding, and replace all trim. 9,910 83.2 50-85
Sunroom addition Add a 200-square-foot room, including foundation. Install energy-efficient casement windows, 10 large venting skylights, ceiling fan, and quarry-tile floor. 69,817 59.1 30-60
Two-story addition Add a first-floor family room and a second-floor bedroom with full bath in a 24x16-foot, two-story wing over a crawl space. 139,297 73.9 60-75
Vinyl-window replacement Replace 10 existing 3x5-foot, double-hung windows with insulated vinyl windows. 10,448 79.3 50-100
Wood-window replacement Replace 10 existing 3x5-foot double-hung windows with insulated wood windows. 11,384 81.2 50-100
Data, except appraisers' estimates © 2007 Hanley Wood LLC. Reproduced by permission. Complete city data can be downloaded free at costvalue.remodelingmagazine.com.