Planning a home renovation? Do it for your own enjoyment, because there's no guarantee you'll get all of your expenses back when you sell.
That's one lesson from a 2014 Remodeling Magazine study. The magazine looked at prices on 35 popular home renovation projects — and just how much of that money homeowners can expect to recoup when they sell.
In the study, prices were based on national averages for time and materials supplied by skilled professionals (no DIY jobs here). While some projects moved the needle on home value more than others, most didn't return 100 percent of the renovation cost at resale, according to the report. And the six projects that yielded the least at resale all returned less than 61 cents on the dollar.
If you renovate, "you have to understand that it may not add the value to your home that it cost you," says Mark Ramsey, broker with The Ramsey Group at Keller Williams Realty in Charlotte, N.C.
So "be happy you did it and got to enjoy it," he says.
Here, according to the 2014 Remodeling Magazine study, are the six home renovation projects that bring the smallest return at resale.
Home office remodel
Cost (national average): $28,000
Return at sale: 48.9 percent
This is not your typical stuff-a-desk-in-the-guest-room office. When Remodeling Magazine priced out the project, it envisioned a professional-grade workspace loaded with super-durable commercial-grade carpet and floor-to-ceiling hardwood built-ins, says Sal Alfano, editorial director for Remodeling Magazine, who oversaw the study.
Harkening back to an age before portable coffee shop laptops and Wi-Fi, the estimated price also includes some heavy-duty rewiring and new walls.
And yes, even with professional work, you could definitely design an office for less, Alfano says.
At resale: Home offices don't sell houses, says Ron Phipps, principal with Phipps Realty in Warwick, R.I., and past president of the National Association of Realtors.
"To spend money making more of the house office-driven — it doesn't excite people the way a home theater might," he says. "Or redoing other rooms or updating the kitchen."
Sunroom addition
Cost (national average): $73,546
Return at resale: 51.7 percent
You know from the word "addition" that this project doesn't come cheap.
Upscale master suite addition
Cost (national average): $224,989
Return at resale: 56 percent
This isn't your typical master bedroom remodel. It isn't even your typical master bedroom addition.
Instead, the Remodeling Magazine estimate for this one includes building (from foundation to roof) a large, detached two-car garage that's heated, cooled and completely finished inside — down to the molding around windows and doors. It is organized floor-to-ceiling with built-in shelves, cupboards and workbench areas, Alfano says. This upscale garage is also fitted out with high-end lighting, and the floor is treated with a stain-resistant epoxy.
Wish you could just pop an extra bathroom onto the back of your house?
That's exactly what this project does. The bathroom is modest: 6 feet by 8 feet, cultured marble vanity, chrome fixtures, ceramic tile and a fiberglass tub/shower combo.
Planning a home renovation? Do it for your own enjoyment, because there's no guarantee you'll get all of your expenses back when you sell.
That's one lesson from a 2014 Remodeling Magazine study. The magazine looked at prices on 35 popular home renovation projects — and just how much of that money homeowners can expect to recoup when they sell.
In the study, prices were based on national averages for time and materials supplied by skilled professionals (no DIY jobs here). While some projects moved the needle on home value more than others, most didn't return 100 percent of the renovation cost at resale, according to the report. And the six projects that yielded the least at resale all returned less than 61 cents on the dollar.
If you renovate, "you have to understand that it may not add the value to your home that it cost you," says Mark Ramsey, broker with The Ramsey Group at Keller Williams Realty in Charlotte, N.C.
So "be happy you did it and got to enjoy it," he says.
Here, according to the 2014 Remodeling Magazine study, are the six home renovation projects that bring the smallest return at resale.
Home office remodel
Cost (national average): $28,000
Return at sale: 48.9 percent
This is not your typical stuff-a-desk-in-the-guest-room office. When Remodeling Magazine priced out the project, it envisioned a professional-grade workspace loaded with super-durable commercial-grade carpet and floor-to-ceiling hardwood built-ins, says Sal Alfano, editorial director for Remodeling Magazine, who oversaw the study.
Harkening back to an age before portable coffee shop laptops and Wi-Fi, the estimated price also includes some heavy-duty rewiring and new walls.
And yes, even with professional work, you could definitely design an office for less, Alfano says.
At resale: Home offices don't sell houses, says Ron Phipps, principal with Phipps Realty in Warwick, R.I., and past president of the National Association of Realtors.
"To spend money making more of the house office-driven — it doesn't excite people the way a home theater might," he says. "Or redoing other rooms or updating the kitchen."
Sunroom addition
Cost (national average): $73,546
Return at resale: 51.7 percent
You know from the word "addition" that this project doesn't come cheap.
Upscale master suite addition
Cost (national average): $224,989
Return at resale: 56 percent
This isn't your typical master bedroom remodel. It isn't even your typical master bedroom addition.
Upscale garage addition
Cost (national average): $82,311
Return at resale: 58.4 percent
This is not your dad's oil-stained garage.
Instead, the Remodeling Magazine estimate for this one includes building (from foundation to roof) a large, detached two-car garage that's heated, cooled and completely finished inside — down to the molding around windows and doors. It is organized floor-to-ceiling with built-in shelves, cupboards and workbench areas, Alfano says. This upscale garage is also fitted out with high-end lighting, and the floor is treated with a stain-resistant epoxy.
Bathroom addition
Cost (national average): $38,186
Return at resale: 60.1 percent
Wish you could just pop an extra bathroom onto the back of your house?
That's exactly what this project does. The bathroom is modest: 6 feet by 8 feet, cultured marble vanity, chrome fixtures, ceramic tile and a fiberglass tub/shower combo.