Remodeling doesn't always add up

According to Remodeling magazine's 2010 Remodeling Cost vs. Value Survey, done in partnership with the National Association of Realtors (NAR), most people planning a home remodeling project will pay a lot more for the job than they will get back in return when they sell. The report claims that on average, only 60% of remodeling costs in 2010 would be recouped by homeowners.

The report acknowledges that curb appeal continues to "play a strong role in a home's resale value." Because of this, the most lucrative of the remodeling projects was replacing the garage door. The report claims this is because garage doors "improve curb appeal in a way that can affect a potential buyer's first impression and, consequently, a home's resale value." According to Lawrence Yun, chief economist for NAR, curb appeal is essential if you want to sell your home. He stated, "In today's buyers market, given the large inventory, where people have so much selection, it's important to have the exterior catch the eye so they're willing to step inside."

Aside from replacing the garage door and a few other exterior projects, most remodel jobs returned a lower percentage of their costs in added home value than they did in 2009.

According to the survey, these remodeling projects will get you the most bang for your buck:

Project	Cost	Resale Value	Cost Recouped
Steel Entry Door Replacement	$1,218	$1,243	102.1%
Garage Door Replacement	$1,291	$1,083	83.9%
Fiber Cement Siding Replacement	$13,382	$10,707	80.0%

All other remodeling projects in 2010 recouped national averages below 80%, with home office remodeling and sunroom additions offering the lowest returns.

Two jobs tied for the best return on a midrange remodeling investment costing more than $10,000. Adding a wood deck or doing a minor kitchen remodel (which involves replacing cabinet doors and counters, buying new appliances, sinks and faucets and repainting walls and trim) each recouped 72.8% of their costs. Remodeling your basement or adding an attic bedroom can get you a higher return (approximately 70%) than adding a wing to your house.

Despite the falling percentages of returns on remodeling projects in 2010, it's important to remember that renovations can also improve the livability and enjoyment of your home. If you love your neighborhood and community, but your home is older or needs minor improvements, it's likely to cost you much less to remodel your current home rather than buying a new one. Replacing old, inefficient products and appliances with highly efficient ones may get you a decent return when you sell and, in the meantime, save you money on your utility bills.

If you chose to remodel, find ways to reduce the cost of your remodeling projects. Otherwise, getting a significant return will be much harder.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com