*** Homeowners undertake remodeling projects for their own family’s enjoyment. But according to U.S. News and World Report’s Money Crashers, some upgrades could end up doing more harm than good when you put your house on the market. Here’s what to avoid:
• Over-the-top kitchen renovations. You may be a gourmet chef. But a prospective buyer may favor take-out rather than topping a dish with truffles. Skip the multiple sinks, restaurant-grade stoves and hoods, and wood-burning pizza ovens. Instead, focus on creating a good traffic flow, period-correct design elements that match the style of the house, and modest appliances.
• Bathroom renovations without eco-minded features. Modest features appeal to a wider range of buyers, including eco-aware consumers who want to eliminate wasteful water usage. In other words, skip the extra-deep Jacuzzi tub and surround shower.
*** A kitchen or bath design specialist, respectively, were cited most often as the primary source for purchases of major kitchen or bath renovations, according to the American Affluence Research Center’s Fall 2010 Affluent Market Tracking Study. The Home Depot was the second most frequently named source, followed by Lowe’s.
The semi-annual surveys by the
AARC focus on the 11.4 million households representing the wealthiest 10 percent of all U.S. households as determined by The Federal Reserve Board. The report is based on responses from 439 men and women with an average net worth of $3.1 million, average investable assets of $1.7 million, and an average primary residence value of $1.1 million.
Eight percent of AARC respondents said they will remodel their kitchen during the next 24 months. The maximum amount respondents who definitely plan to remodel their kitchens said they could imagine spending is $35,000.
Meanwhile, 11 percent stated they definitely plan to remodel a bathroom. The maximum amount they plan to spend is $15,000.
*** Are home upgrades worth the cost? Yes, though projects that enhance curb appeal, rather than interior remodels or replacements, are most likely to recoup dollars according the 2010 Cost vs. Value Report by Remodeling magazine. The annual survey uses input from realtors in 80 cities to rank home remodeling projects according to those that bring the greatest cost recovered at resale.
A midrange entry door replacement, for instance, brings the highest return at a national average of 102.1 percent, followed by a midrange garage door replacement, at 83.9 percent, and a fiber-cement siding upgrade, which recoups 80 percent of the cost. Step into the home, and a midrange kitchen remodel recoups an average 72.8 percent. Meanwhile, a wood deck addition also generates a 72.8 percent return.
The top interior projects for resale value included an attic bedroom and a basement remodel. Both add living space without extending the footprint of the house. An attic bedroom addition is estimated at more than $51,000 and recoups an estimated 72.2 percent nationally upon resale; a basement remodel can cost upwards of $64,000 and recoups an estimated 70 percent. Improvement projects that are expected to return the least are a mid-range home office remodel, recouping an estimated 45.8 percent; a backup power generator, recouping 48.5 percent; and a sunroom addition, recouping 48.6 percent of costs.
