By Teresa Mears
Even if you’re not planning to sell your home anytime soon, it’s an inevitable question when you consider remodeling: How much will this improvement add to the value of my home?
Surprisingly, much of the time the answer is not as much value as it costs to actually make the improvement.
But some home renovations bring you more bang for your buck than others.
The top-ranking home improvement? A new front door, which on average adds 96.6 percent of the amount you spent to the value to your home, according to Remodeling magazine’s annual Cost vs. Value Report for 2014.
But "it has to be the right front door," says Steven Aaron, owner of the Steve Aaron Realtor Group at Keller Williams Beverly Hills and one of the protagonists of the HGTV series "Selling LA." Keep in mind that sometimes painting the existing front door provides the same payoff.
All 35 projects included in the Cost vs. Value report added more value this year than last year, and this is the second consecutive year of increases after several years of decline.
Replacing old elements, such as doors, windows and siding, in general yielded a better financial return than bigger remodeling projects, such as additions. But real estate agents and remodelers say updated kitchens and baths still bring a significant payoff, especially at resale time. The report found that kitchen projects yielded a higher return than bath projects, with a minor kitchen remodel adding 82.7 percent of the project’s cost back to the home’s value. Kitchens are important, Aaron says, because would-be buyers often overestimate how much they would cost to update.
"If you have a dated kitchen … and a buyer walks into that kitchen, they’re going to think that in order to redo that kitchen, they’re going to have to spend $40,000 or $50,000," Aaron says.
But the average cost of a minor kitchen remodel – new cabinet doors, appliances, countertops, sink, faucet, paint and hardware – was $18,856 nationwide, according to the Cost vs. Value report. Savvy shoppers can do it for less than the buyer assumes.
But, like the front door, it’s important to do the right kitchen remodel. Adding a $75,000 kitchen to a $100,000 house is unlikely to yield $75,000 in value, although it may make you a happy chef. As a general rule, look to spend about 25 percent of the home’s value for a new kitchen and 12 percent to 15 percent for an updated bathroom, says David Pekel, president and CEO of Pekel Construction in Milwaukee and a master certified remodeler.
Putting an ultramodern kitchen into a 100-year-old Tudor home isn’t smart, either. "Whatever your home improvement is … I strongly discourage designing new spaces in a fashion that’s incongruous with the rest of the house’s architectural vernacular," Pekel says. "It doesn’t really add value. It detracts."
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