Payoff varies if you remodel

Survey finds deck best for recouping investment

Cost vs. value weighed

Some projects won't pay their way at sale time

December 07, 2003|By Mary Umberger | Mary Umberger,CHICAGO TRIBUNE

Having the fanciest house in the neighborhood might be good for your pride, but when it comes to selling it, you might discover that few buyers have pockets deep enough to cover your lavish improvements.

In other words, installing sterling silver light fixtures might be a cost that can never can be recouped.

Setting a benchmark for the potential payback for specific home improvements long has been the goal of an annual study by Remodeling magazine.

Now in its 15th year, the "Cost vs. Value Report" is a complex market snapshot that asks real estate agents around the country to weigh typical costs for certain popular projects against what homeowners might recoup at sale time.

This year, the trade journal asked about rates of return on converting attic space into a bedroom; remodeling a basement; adding a family room; adding a deck; and replacing siding.

Because budgets can vary wildly for certain jobs, it also looked at rate of return on "midrange" and "upscale" versions of remodeling a bathroom, adding a bathroom, replacing 10 windows, a major kitchen renovation and adding a master suite.

The report concluded that homeowners on average are most likely to get the best return by adding a 16-by-20-foot wooden deck. The survey said a homeowner could expect a return of 104.2 percent from the $6,304 spent.

The magazine found the lowest payback nationally is from a midrange kitchen renovation, saying a homeowner could expect to recoup 74.9 percent of the $43,804 spent.

The magazine said the remodeling would include updating a 200-square-foot kitchen with new cabinets, flooring, laminate countertops, a double-tub stainless steel sink, appliances and lighting.

"The idea is to give people a general idea," said magazine editor Sal Alfano. "If resale is a concern, there's no substitute for talking to your local real estate agent, who can tell you what is happening nearby. These are averages, and from one neighborhood to the next, a few blocks away, there can be huge differences."

Appraisers say most remodeling projects can add value to a property, but only if they fit in with the rest of the neighborhood. They warn homeowners about the danger of spending too much on remodeling projects with the idea of recouping the investment.

For reasons of cost and logistics, Remodeling rotates several projects in and out of the study every year, so each one isn't a complete benchmark.

Baltimore was excluded this year from the more detailed list of regional markets. Alfano said the magazine decided to focus on Washington for this region.

Alfano predicts that certain projects will gain a lot more resale respect in the next few years, and they're not the glamour items.

"I expect to see roofing, siding and window replacement get higher values," he said. "Potential buyers are starting to say, 'I don't want to fool with it.' "

The results are at www.remodeling.hw.net and at the Web site of Realtor magazine, www.realtormag.com, which collaborated on the study.

The Chicago Tribune is a Tribune Publishing newspaper.

What's cost effective

Percentage estimates of what homeowners can expect to receive in a resale of their homes after making the following improvements:

Deck addition: 104.2 percent of $6,304 spent.

Siding replacement: 98.1 percent of $7,329 spent.

Midrange bathroom addition: 95 percent of $15,519 spent.

Attic bedroom: 92.8 percent of $32,863 spent.

Upscale bathroom renovation: 92.6 percent of $23,544 spent.

Midrange bathroom renovation: 89.3 percent of $10,088 spent.

Upscale window replacement: 87 percent of $15,577 spent.

Midrange window replacement: 84.8 percent of $9,568 spent.

Upscale bathroom addition: 84.3 percent of $38,134 spent.

Family room addition: 80.6 percent of $53,983 spent.

Upscale kitchen renovation: 79.6 percent of $68,962 spent.

Basement renovation: 79.3 percent of $43,865 spent

Upscale master suite: 76.9 percent of $133,993 spent

Midrange master suite: 76.4 percent of $70,760 spent

Midrange kitchen renovation: 74.9 percent of $43,804 spent

Source: Remodeling magazine's "Cost vs. Value Report" for this year

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