6 worst home fixes for the money
By Dana Dratch of Bankrate.com
Planning a home renovation? Do it for your own enjoyment, because there's no guarantee you'll get all of your expenses back when you sell.
That's one lesson from a 2014 Remodeling Magazine study. The magazine looked at prices on 35 popular home renovation projects — and just how much of that money homeowners can expect to recoup when they sell.
In the study, prices were based on national averages for time and materials supplied by skilled professionals (no DIY jobs here). While some projects moved the needle on home value more than others, most didn't return 100 percent of the renovation cost at resale, according to the report. And the six projects that yielded the least at resale all returned less than 61 cents on the dollar.
If you renovate, "you have to understand that it may not add the value to your home that it cost you," says Mark Ramsey, broker with The Ramsey Group at Keller Williams Realty in Charlotte, N.C.
So "be happy you did it and got to enjoy it," he says.
Here, according to the 2014 Remodeling Magazine study, are the six home renovation projects that bring the smallest return at resale.
Home office remodel
Cost (national average): $28,000
Return at sale: 48.9 percent
This is not your typical stuff-a-desk-in-the-guest-room office. When Remodeling Magazine priced out the project, it envisioned a professional-grade workspace loaded with super-durable commercial-grade carpet and floor-to-ceiling hardwood built-ins, says Sal Alfano, editorial director for Remodeling Magazine, who oversaw the study.
Harkening back to an age before portable coffee shop laptops and Wi-Fi, the estimated price also includes some heavy-duty rewiring and new walls.
And yes, even with professional work, you could definitely design an office for less, Alfano says.
At resale: Home offices don't sell houses, says Ron Phipps, principal with Phipps Realty in Warwick, R.I., and past president of the National Association of Realtors.
"To spend money making more of the house office-driven — it doesn't excite people the way a home theater might," he says. "Or redoing other rooms or updating the kitchen."
Cost (national average): $73,546
Return at resale: 51.7 percent
You know from the word "addition" that this project doesn't come cheap.
Anytime you have to add onto the foundation — and the footprint of your home — the price climbs, says Michael Hydeck, owner of Hydeck Design Build Inc. near Philadelphia and past president of the National Association of the Remodeling Industry.
With a 200-square-foot room with skylights, low-E windows, automatic shades and a tile floor, "it's a major project," says Alfano.
It can make a big difference in your enjoyment of the home and — depending on how it's configured — help heat adjacent rooms, he says. "You can do some pretty creative stuff with this."
At resale: Resale value will vary by region, Phipps says. "You have to look at what your market is."
In Las Vegas, homeowners are more likely to add a roof or cover to the patio — something with privacy curtains, but no walls, says David R. Tina, president of the Greater Las Vegas Association of Realtors and an owner/broker with Urban Nest Realty.
Whatever you build, if you want to get the biggest bump to your home value, opt for a licensed professional and permitted work, he advises.
Upscale master suite addition
Cost (national average): $224,989
Return at resale: 56 percent
This isn't your typical master bedroom remodel. It isn't even your typical master bedroom addition.
Instead, picture adding a luxe hotel suite onto your house: a 640-square-foot space with a kitchenette, sitting room, high-end gas fireplace and a spa-quality bathroom -- complete with a stone-and-glass dual-system shower and a jetted corner tub set in marble.
By contrast, Remodeling Magazine figures that a more moderate master suite addition -- 384 square feet with more modest materials (and minus the fireplace and kitchenette) -- would cost $103,844 and return just 67.5 percent at resale.
For the upscale version, unless you want to risk "over-remodeling" (building more into your house than the neighborhood home values support), you probably need a house (and neighborhood), where the home prices are no less than $800,000 to $1 million already, Alfano says.
At resale: Master suites are one of three crucial areas for buyers, along with kitchens and bathrooms, Ramsey says.
Want to get a little more bang for a lot less buck? Keep the existing footprint of your house and update your master bedroom area, he says.
Pay special attention to the closets and bathroom. Double sinks and vanities, nice showers, and new paint and carpet are popular now, Ramsey says.
pscale garage addition
Cost (national average): $82,311
Return at resale: 58.4 percent
This is not your dad's oil-stained garage.
Instead, the Remodeling Magazine estimate for this one includes building (from foundation to roof) a large, detached two-car garage that's heated, cooled and completely finished inside — down to the molding around windows and doors. It is organized floor-to-ceiling with built-in shelves, cupboards and workbench areas, Alfano says. This upscale garage is also fitted out with high-end lighting, and the floor is treated with a stain-resistant epoxy.
"It's a high-end project," Alfano says. This type of renovation appeals to women as much or more than men, he says. With places to store all the items that tend to clutter a garage, often "it's for wives who want their garages back," he says.
A moderate garage addition — the same size, also detached and professionally built, but unfinished inside, with an automatic door and modest overhead fluorescent lighting — would run roughly $49,911 and return just over 69 percent at resale, the study concluded.
At resale: High cost or low cost, in areas where homes don't have basements or attics, garage storage can be "really important" at resale time, says Phipps.
Cost (national average): $38,186
Return at resale: 60.1 percent
Wish you could just pop an extra bathroom onto the back of your house?
That's exactly what this project does. The bathroom is modest: 6 feet by 8 feet, cultured marble vanity, chrome fixtures, ceramic tile and a fiberglass tub/shower combo.
The magazine wanted to demonstrate the cost of a simple bathroom addition, Alfano says. Because it's an addition — and involves extending the foundation and roof, plus adding outside walls — it's a lot more expensive than creating a new bathroom within the existing space, he says.
In real life, homeowners would probably not be using an addition to add just a bathroom, says Hydeck. More likely, it would be a small part of a larger addition, such as a family room, he says.
As part of a larger addition, he says the cost of that bathroom goes down substantially.
Another option: Find room within the existing square footage — without adding onto the house, Hydeck says. Although, "with a small house, a lot of times that's difficult to do."
At resale: Home within neighborhood norms? Then one bathroom more or less won't really affect the selling price, says Phipps.
"Think about the investment and what you're trying to achieve before you spend the money," he advises.
Upscale bathroom addition
Cost (national average): $72,538
Return at resale: 60.6 percent
This bathroom is a little larger, and a lot more luxurious than the more modest version, but the percentage that homeowners recoup at resale is almost identical, according to the 2014 Cost Vs. Value report.
At 100 square feet, this project is designed as a master bath. It includes a glass shower with body-spray features and ceramic tile walls, as well as a customized, jetted tub.
This bathroom would include a stone counter with two sinks and two mirrored medicine cabinets, plus a separate water closet with a fan. It has heated, ceramic tile floors, heated towel bars and built-in cabinets.
Since this project adds to the footprint of the home, it's more expensive than converting existing space into a bathroom, Ramsey says.
At resale: If you're adding this luxury bathroom to the first floor to create a master on the main level, that could be valuable at resale time, he says.
The idea of a main-floor master suite is becoming more and more popular with buyers, says Ramsey. So if adding a master bathroom downstairs enables the homeowner to have a master suite or second master suite on the main level, that luxury bathroom "could be the smarter investment" than the smaller bathroom addition at resale, he says.