We all know that when we make improvements to our homes, we don't typically get 100% of our investment back when we move. And certainly, we make improvements to our homes for more reasons than just the return on investment. We do it to enjoy the time we spend in our home, to keep it up to date with current trends, and to personalize it to our individual tastes. But how much a typical project return?
Knowing that can help you properly plan and budget. Otherwise, a project stands to drain your wallet both now, and down the road at resale time.
The National Association of Realtors (NAR) has released its annual report today. The report documents the average cost associated with a variety of home improvements, as well as the average increase in value that improvement has on a typical home, in different areas of the U.S.
According to NAR, "of the projects that saw national cost recovery rates of more than 80%, only one- a minor kitchen remodel" (83% cost recovered) "was a strictly interior job." This years report found that "no project exceeded 88% return", while most projects recouped in the neighborhood of 55 to 60% of the initial cost.
Des Moines, Iowa was included in the West/North Central category that included Kansas, Minnesota, Missouri (my home state), Nebraska, and the Dakotas.
Common updates to a midrange home in Des Moines, and their corresponding return included*:
Deck Addition; Cost=$9,568; Resale Value=$7,505; Cost Recouped=78.4%
Minor Kitchen Remodel; Cost=$20,838; Resale Value=$15,257; Cost Recouped=73.2%
Wood Window Replacement;Cost=$10,978, Resale Value=$7,423; Cost Recouped=67.6%
Coming in at the low end of the scale for the West/North Region was a home office remodel, which only brought a 48.1% return, on average.
A free copy of the report can be found online by visiting Cost Vs. Value.
Anyone up for a project??
*Sorce:Realtor Magazine, December 2007 & The NAR Cost Vs. Value Report, 2007.
Brian Wentz & Beth Ernst
515-334-4994
www.BrianWentzRealtor.com
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Being a numbers person, I always enjoy reading this report, to see how the midwest fares against other regions. 60 to 70% return is doing pretty good!