Are you planning a home improvement project this year? If so, you can expect a slight increase in return on your investment compared to 2018, according to Remodeling’s annual Cost vs. Value Report of 22 different renovation types. “For all projects, the overall cost-to-value ratio stands at 66.1 percent, slightly ahead of last year,” the authors note.
At the same time, the survey of 3200 real estate professionals in 136 U.S. markets points out that costs have also increased – and at a much higher rate. The reasons include more expensive building materials, partly because of tariffs, and higher labor costs. The projects that show the greatest ROI enhance curb appeal, the survey reveals. The three exterior improvements with the highest recoup on investment are garage door replacement (97.5 percent), manufactured stone veneer installation (94.9 percent), and a wood deck addition (75.6 percent).
Inside your home, less is proving to be more in terms of ROI. While an upscale $64,743 bathroom remodel returns 60.2 percent, its midrange $20,420 version can yield seven percent more. What’s included in upscale vs. midrange? You’re getting more space in the upscale project, taking it from 35 square feet to 100 (with radiant floor heating and a separate area for the toilet), and relocating your fixtures for better flow. You’re getting stone countertops, rather than solid surface tops, custom cabinetry with drawers, two sinks with high end faucets and a freestanding soaker tub. This is the type of bathroom you might have crave on HGTV or Houzz to maximize your enjoyment, but it’s clearly not the type of project that’s going to maximize your return on investment.
A midrange kitchen remodel returns 62.1 percent, while an upscale redo comes in at 59.7 percent. How do those projects compare? Looking at two outdated 200 square foot kitchens, the upscale $131,510 redo includes custom cabinetry with roll-out shelves and interior organizers, stone countertops and tile floors.
The midrange $66,196 project offers semi-custom cabinets with laminate countertops and vinyl flooring. It will include a standard faucet and sink, while its upscale counterpart will feature an undermount sink, designer faucet and water filtration. Appliance packages will contrast, too, with the upscale kitchen offering built-in cooking and refrigeration, as well as a commercial style cooktop and vent hood. The midrange kitchen will include an energy efficient range, vent hood and microwave.
The kitchen improvement project with the highest ROI (80.5 percent) is the minor midrange redo. What does “minor” mean, other than dramatically improved return? Less demolition, for one. You’re keeping your cabinets, but replacing their fronts with shaker style doors and drawer fronts and new hardware. You’re replacing your range or cooktop and freestanding refrigerator with more energy efficient models. You’re also replacing your laminate tops, sink and faucet with newer versions and getting new vinyl flooring. A paint job, including ceiling and trim, will complete the project. Allowing for regional cost differences, the national average cost is $22,507 and average value $18,123, which will be very good news for starter home buyers.
