A brand new bathroom will add about $23,000 to the resale value of your home. Photo: Los Angeles Times
As someone who's practically obsessed with my home, here's my wish: that every dollar I spend fixing it up will be returned to me when I sell it.
Wouldn't that be a great argument to have when my husband and I engage in remodeling wars? He would say: "That's too much to spend." And I would say: "So what? We'll get it all back when we sell the house."
Of course, that scenario is far from reality. Rarely will you get back 100% of a project's initial cost when you resell your house.
Case in point: If I spend $39,000 to add a new bathroom, I can expect it to increase the appraised value of my home by $23,000, which means I will recoup only 60% the cost when I sell my home.
How do I know this? I read Remodeling Magazine's 22nd annual Cost vs. Value Report
. Relying on input from real estate agents and other building professionals, the report rates the 33 most popular major home improvement projects based on cost vs. resale value -- basically, how much they'll each add to the dollar value of your house.
So why invest in these major improvements? In our current buyer's market, says the National Association of Realtors
, houses with well-done improvements tend to sell quicker than their shabbier neighbors.
Looking to remodel? A new attic bedroom will yield the highest return on investment. Photo: Janesdead, Flickr
Of course, some improvements are more popular with buyers than others. The top rated projects include a $49,000 attic bedroom (which adds 81% of its cost -- or $41,000 -- to the value of your home), an $11,000 wood deck (recoups 80% of its cost -- or $8,500) and a $21,000 minor kitchen remodel (recoups 78% of its cost, or almost $17,000).
I know what you're thinking: Spending $21,000 on a kitchen remodel is considered a minor
remodel? Well, Remodeling Magazine is primarily read by contractors, so most of these "cost" figures are actually based on contractor fees -- not necessarily DIY work. But the "value" part of the equation -- the amount the improvement adds onto the appraised value of your home -- remains the same.
But how about if you do
That brings us back to the bathroom. Let's say you and your brother-in-law and your fireman buddy from high school are really handy and do the addition yourselves for, say, $23,000 in materials, permits and tools. That addition, according to this report, will add $23,000 onto the cost of the house. That equals a 100% return. The conclusion: It pays (literally) to DIY .
I can just hear my husband and I arguing over that one.
Him: "It's too much to spend."
Me: "We'll get ALL our money back when we sell."
Him: "OK, but I'm not doing all the work myself. Are you with me on this one?"
Me: "Let's roll."
So as you're perusing the numbers on the Cost vs. Value Report, be sure to mentally figure the cost to DIY. You could even come out ahead.
To research costs for professionally done projects, expected recoup value, and trends in your area, click on your region below.
East South Central
West South Central
East North Central
West North Central
To compare projects and regions, go to the Cost vs. Value Report.