Kitchens and baths continue to be the home improvements most likely to return value when selling a home. According to statistics compiled by the National Association of Realtors, last year, the national average cost of a midrange bathroom remodel was $10,499 and the return at sale time was $10,727, or 102.2%. Kitchens also give the homeseller a return on value – the national average cost of a midrange kitchen renovation was $43,862 and the return on sale price was $39,920 or 91% of the cost to remodel.
This doesn’t mean you should go out and upgrade your kitchen or bath immediately when planning to sell your home. It means that if you are considering a renovation, and want to recover the cost when you sell, you are best likely to get “bang for the buck” with these renovations.
It is important when considering the ratio of cost to value in renovations to gauge what is happening in your region, and in your neighborhood. The six figure kitchen upgrade with expanded area, stone countertops, top of the line steel appliances and enough cabinet space to accommodate “Kitchen Stadium” may not return the maximum value if it is done in an area where kitchens and homes are of more middling value. If you are adding a bathroom to a one bathroom home in a neighborhood where most homes already have two baths, you may not see as much value return as the average. You might find that in such a community, remodeling an existing bath has a higher cost to value return.
The most important thing to consider in any renovation is what you want and need. The advantage to your family of living in a home with an extra bath should also be calculated in the value for most homeowners. Bedrooms are also renovations that are sensitive to regional expectations. Across the country, the home improvement project with the least cost to value return is the home office.
The savvy homeowner should keep up with the Joneses when possible, but ultimately the best reason for home improvement is your own enjoyment!