Exterior Home Improvement Projects Provide the Best Return on Investment
REMODELING Magazine's recently released 24th annual Cost vs. Value Report shows that exterior home improvements are leading the list of home improvements based on the return on investment. The free 2010-2011 report covers 80 U.S. cities and is available for download at http://www.costvsvalue.com. The report contains data that compares construction costs for popular remodeling projects against the share of those costs recovered at resale. In addition to city data, the report includes tables with national and regional averages, as well as complete project descriptions, 3-D images and QuickTime movies for all 35 projects surveyed.
The best return on investment was a steel entry door replacement which provides a 102% return on the cost at resale. A garage door replacement provides an 84% return. Projects with a 70-80% return included attic bedroom remodels, basement remodels, wood decks, minor kitchen remodels, window replacements and siding replacements. It is interesting that half of the eight best returns on investments, including the two top, were exterior improvements. This suggests that they might be effective investments for home sellers looking for an extra edge in the curb appeal department. The best return on investment for owners of single family homes will be landscaping in many cases. Thoughtful landscaping on an under landscaped home can return more than 100% of the investment, especially if you plant smaller trees and shrubs and give them a few years to grow.
The two lowest returns on investment (under 50%) were home office remodels and backup power generators. The former was somewhat surprising since home office remodels, which had an average cost of $29,000 yet returned just over $13,000 at resale have such a low rate of return given the growing popularity of teleworking. It may be that more modest permanent home office remodels, or ones that use available furniture or other alternatives to built ins can provide better returns.
Homeowners can improve the rate of return on these projects by doing some of the work themselves. Fairly simple and end of job tasks such as painting and installing trim (moldings, baseboards, etc.) are easy enough for most homeowners. You can also save money by buying kitchen appliances from discounters or on sale rather than getting them through a remodeling contractor.
One important word of caution: complaints about remodeling contractors continue at the top of the American Homeowners Foundation's and Better Business Bureaus complaint list. If you are doing a substantial remodeling project, always utilize a comprehensive written contract to protect interests. The Foundation offers an inexpensive eight page model contact in MS Word digital format. Available on our website, it is written in plain English and intended to reduce disputes by giving both parties a clear sense of their respective obligations and responsibilities. Other organizations offer them as well. An attorney can also draw up a contract, and if a remodeling contractor wants to use his own contract form, you should always consult an attorney if there are any parts you don't understand.
Courtesy of the American Homeowners Foundation and the American Homeowners Grassroots Alliance, www.AmericanHomeowners.org.