Each year, Realtors team up with the country’s leading building trades publisher, Hanley Wood, to assess what some 36 remodeling projects are worth if the homes are sold within a year.
The 2015 Remodeling Cost vs. Value Report released last month indicated that the (financial) return on investment (ROI) is expected to decline in 31 out of 36 projects, with automatic backup power generators taking the biggest hit. How quickly we forget the storms of June 2013 that left more then 500,000 Xcel Energy customers without power for days, the largest outage in company history. The study also reminds us that we mostly remodel our homes for ourselves, not for the next buyer.
Hendrickson Custom Builders clients improve their homes to upgrade their lives. They hire us to convert small kitchens into open floor plans, add porches where they can extend the outdoor season, transform second-class basements into first-rate destinations for family fun and adult entertaining. We also help them adapt their homes so they are safe, accessible and easy to maintain long after retirement.
Remodeling report is valuable reference
Even if you are not planning to sell your home, the 2015 Remodeling Cost vs. Value Report serves as a worthwhile reference because it defines and quantifies popular projects and suggests what each should costs. To use the study, first drill down to specify the West North Central region and Minneapolis metropolitan area. Second, understand that a project’s scope will be different from your own.
RemodelMAX prices each project using its Clear Estimates remodeling software. It begins by preparing detailed quotes for each project. Then it adjusts the costs to account for regional pricing variations for labor, materials, subcontractor expenses and overhead and profit.
Mid-range kitchen remodeling
Here’s how they describe a major, mid-range kitchen remodeling, which they priced at $56,768.
Update outmoded 200-sf kitchen with a functional layout of 30 linear feet of semi-custom wood cabinets, including a 3-by-5-ft island; laminate countertops; and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposal, and custom lighting. Add new resilient flooring. Finish with painted walls, trim, and ceiling.
The Realtors concluded this kitchen upgrade would retain 67.8 percent of its value at resale in the Minneapolis market. But what if you substitute granite for laminate counters and solid wood for vinyl flooring and want to knock down a wall?
Many homeowners ask for a ballpark price the very first time they meet with a contractor. Until the scope of a project is determined and materials are specified, it’s impossible to provide a meaningful estimate. However, it can be helpful to use the Cost vs. Value projects for a frame of reference.
Best Payback Projects
According to the new study, only wood replacement windows and steel replacement entry doors are worth more than they cost if you sell your house in the next year. Windows appreciate 5.8 percent while doors appreciate 4.6 percent. The next closest project is installing stone veneer on the front of your house, which loses 13.2 percent of its value.