I once was provided a report that ranked home improvements comparing the return that one would get back comparing dollar spent to dollar received if someone were to do the improvement and then sell the home afterwards. Different areas of the country and different cities had different results. Some areas had higher returns for certain improvements while other areas had lower numbers than ours. Here’s what it said about the Indianapolis market. If one were to do a bathroom remodel, they could expect to get back 82.2 percent of that money upon resale. For a minor kitchen remodel, one could expect 81.7 percent of that. For siding replacement 82.5 percent. For converting an unfinished attic into a bedroom, 70.3 percent. For a deck addition, 70.3 percent. For a basement remodel, 76.2 percent. For window replacement, 70.4 percent. For roof replacement, 70.0 percent. Family Room addition, 70.7 percent. Home office remodel, 67.8 percent. Wow…that kind of makes you not want to do anything at all if it means loosing money? Possibly, but it’s not as simple as that.
It’s entertaining to see numbers like this published because it looks so official, but honestly my confidence level in studies like these are pretty low. There are so many variables and each home is a unique situation. For instance, I’ve seen many homes that would never sell because the roof was so bad that no one would buy it unless it were replaced first. In that case, the return would be 20 to 30 times the cost of the roof. I’ve also seen homes that an addition was thought out and built so poorly that it hurt the functionality of the home, making the home extremely difficult to sell. How would they affix a value to that? Also, I’ve seen homes where the kitchen remodel was such a beautiful change that it brought the owners several times their investment had they not done the remodel.
It’s been proven that the best improvement someone could do to get the most bang for the buck if you were thinking about selling, would be to just clean and paint to brighten and freshen up the interior and exterior. Also, removing clutter and depersonalizing doesn’t cost anything but has a huge impact on resale and the bottom line. There is some truth to this study though, in that in most cases, people should not enter in to doing home improvements expecting them to increase the value to your home. Instead, do the improvements for your own enjoyment and to get some use out of them. That’s the real value. Over time, in this market, most home values rise slow but steady, but along the way it’s a nicer place to live too.
