Editorial
Front Page - Monday, November 02, 2009
House to House
Bang for the buck?
Ethan C. Nobles
By Ethan C. Nobles
Arkansas Realtors® Association Ethan@ArkansasRealtors.com
According to Hanley Wood (HanleyWood.com), the U.S. remodeling industry pulls in $306 billion a year.
The folks at Hanley Wood ought to know what they’re talking about as that group publishes Remodeling magazine and, as such, has kept close tabs on that industry for a couple of decades. Hanley Wood publishes an annual report in which the group takes a look at what a lot of homeowners want to know – what remodeling jobs offer the most return on an investment?
Batesville Realtor Bill Olson and Paragould Realtor Debbie Rawls didn’t hesitate a bit when asked what remodeling jobs offer the most bang for the buck – they said projects involving renovations of kitchens and bathrooms are the most valuable when a home is sold.
A Hanley Wood report issued in December confirms that Olson and Rawls are correct. According to that company, a minor kitchen remodel offers a 79.5 percent return on investment while a major one nets 76 percent of the project cost when a home is sold.
As for remodeling a bathroom, Hanley Woods reports that a remodel nets 72.9 percent of the initial investment when the home is sold. A bathroom addition, however, nets only a 63.5 percent return on average.
Bear in mind that the return on investment calculation is an attempt to let homeowners know how much they’ll recover if they sell the property shortly after the remodeling project is complete. The return on investment could be higher if the owner holds onto the home for a few years after the job is finished if the value of the home increases.
Meanwhile, Realtors in Arkansas have confirmed that the old adage is true – it is very possible to recoup 100 percent of your initial investment (or more) in this state for kitchen and bathroom remodels. Again, we’re talking about netting that return on investment after holding onto the house for awhile instead of selling it immediately after the remodel is finished.
The Hanley Wood report, however, has revealed a few more remodels that satisfy the “bang for the buck” equation nicely. According to that company, the projects that offer the largest return on investment almost immediately after they are completed are a wooden deck addition (81.8 percent return on investment), vinyl siding replacement (80.7 percent), wooden window replacement (77.7 percent), vinyl window replacement (77.2 percent) and attic bedroom (73.8 percent).
You’ll notice the bulk of those projects are smaller than bathroom or kitchen remodels. The exception to the rule is the attic bedroom, which coasts on average $48,398 – $27,000 more than a minor kitchen remodel and $33,000 more than a bathroom remodel.
In addition to listing the remodeling projects that provide the highest immediate return on investment, Hanley Wood lists the ones that do not. The projects that fill out the bottom of that list are home office remodel (54.6 percent return on investment), sunroom addition (56.7 percent return), back-up power generator (57.2 percent), family room addition (65.9 percent) and master suite addition (66 percent).
Of course, we’re talking about national averages here. To see the Cost vs. Value Report for national regions and individual cities, visit www.costvsvalue.com on the Internet.
House to House is distributed weekly by the Arkansas Realtors Association
Share
|