Which home improvements will increase my home value the most?

Last week, Remodeling Magazine published its 26^th annual report on the relationship between the cost of a remodeling project and the value the project adds to the home. Factored into the report is information related to the changing costs of remodeling projects and the effects of the real estate market on local and national home prices in 2012. Remodeling Magazine calculates a return-on-investment by determining the percentage of the job cost that is recouped in the resale value of the home.

The remodeling projects that recoups the highest percentage of job cost is the replacement of the entry door with a steel door. Nationally, this project recouped nearly 85.6% of its cost in resale value. Since replacing an entry door is a relatively small remodeling project, averaging below $1200, it could be a great investment for homeowners. A fiberglass entry door replacement 
ranked 12^th on the list and recoups 61.3% of its value at resale. Since fiberglass doors cost more and recoup less at resale, smart homeowners are doing their research right now.

Garage door replacement was second on the list, recovering 75.7% of its cost in increase in resale value. Also a lower end remodeling project, replacing a garage door averages about $1500.

Vinyl siding ranked third in the list, recouping 70.2% of its cost.  Vinyl siding costs about $12,000 on average, according to Remodeling Magazine, and increases the value of a home about $8300.

Adding a deck may be a great way to enjoy your home more and recoup 69% of the cost of the deck when you sell your home.

A minor kitchen remodel of about $19,000 was 5^th on the list and averaged 66.2% cost recovery at sale. A major kitchen remodel, costing about $56,000, recouped 61.8% of its cost, making updated kitchens still one of the biggest selling points in a house.

Adding bedrooms still ranks high on the list of home improvements. An attic bedroom may recover 65.9% of its cost whereas a master suite addition may recoup 57.8%.

Remodeling a bathroom, costing about $16,000, recovers 56.5% of its costs whereas adding a bathroom, at $39,600, recovers only 47.5%.

On the list at number 19 is installing a backup power generator. This project may run you up to $12,000 but you will, on average, recover 47% of that cost in increased resale value.  For those of us in NJ who lost power for 1-2 weeks this fall, thanks to Hurricane Sandy, that number may be skewed higher.

How does this compare to 2011? Read last year’s report here.