4 Remodeling Projects That May Pay Off

Jan 27, 2012

By Staff Writer State Farm™ Employee

If you’re planning to remodel a home office and hoping to recoup your investment when you sell your home, you could be disappointed. According to the Remodeling Cost vs. Value Report 2011-2012 from Remodeling magazine you'll recover slightly less than 43 percent of your money for this project. But upgrade your exterior with fiber-cement siding and you might see a return of 78 percent in terms of increased home value.

For many homeowners, how an improvement affects a home's resale value is a critical factor in deciding whether the project goes forward. Here are four investments that paid off from this year's report:

  • Replacement projects: On average, replacing things like flooring, countertops, fixtures and cabinets returns 64 percent of the project costs upon sale, compared to large scale remodeling jobs, which return 57 percent. Replacements typically cost less and are appealing to buyers because they are important indicators of home maintenance.
  • New siding, windows and doors: These projects enhance curb appeal and have some of the biggest payoffs when you sell.
  • Remodeled attic space: Creating a bedroom in a previously unused area pays a 72.5 percent return on the investment, largely because the project adds living space without expanding a home's footprint.
  • Kitchen facelifts: These minor remodeling projects often include new cabinet doors, hardware, countertops and appliances—and typically return more than 72 percent of the investment.

  • One add-on that doesn't pay off well is a sunroom addition. While a pleasant sunroom may be your family's favorite relaxation spot, this project typically returns less than 46 percent of your investment.

    In addition to payback rates, the report cites other considerations for homeowners who are planning a home improvement. For example, recognize that adding a room may provide you with more space but may result in increased household heating and cooling bills. Enlarging a bathroom at the expense of a bedroom may make perfect sense for your family, but be seen as a lost room by a buyer. Elaborate remodeling projects that are out of sync with the value of the surrounding homes may also be a negative in the eyes of potential buyers.

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