Comparing home improvement ROI
Top projects based on joy rating
An old real estate adage says the kitchen is the most important room in the house. But does remodeling it give homeowners the most return on their investment?
By far, the answer is no, unless one considers increased odds of selling the home enough of a return.
That’s according to the latest Remodeling Impact Report from the National Association of Realtors, which compiled data from industry professionals and homeowners about 20 home improvement projects and ranked them according to a “joy” rating and a return on investment.
The two measurements don’t always align.
A complete kitchen renovation received the highest joy score, a 10 out of 10. Almost all survey respondents said they had a greater desire to stay in the home, or at least a greater sense of enjoyment living there, after the project. Ten percent of agents said doing so helped in closing a home sale.
But the average cost of a complete kitchen remodel, according to a survey of National Association of the Remodeling Industry members, is $68,000. Real estate agents estimated about $40,000 is recouped when the home is sold. That’s a 59% return on investment.
Homeowners fare worse when they spend the average $38,300 on a kitchen upgrade, such as improving worn-out surfaces and finishes. This project received a joy score of 9.7 but a 52% ROI. Still, 20% of agents said kitchen upgrades helped sell a home.
The most fiscally advantageous home improvement project is usually something homeowners think of once a quarter century: roofing.
Only 65% of homeowners reported a greater desire to live in their home after getting new roofing, giving it a joy score of 9.5. But agents estimate the average $7,500 roofing project returned $8,000 into the home’s resale value, a 107% return.
Plus, a third of agents said it helped close the sale.
The costs and values in the NAR report are based on the average-size home built after 1981 with no hidden issues, using mostly standard-quality materials.
Wondering about the return on investment for replacing your HVAC system, converting the basement to a living space or replacing your garage door? Read the entire report at the National Association of Realtors website.
Morning Call reporter Kayla Dwyer can be reached at 610-820-6554 or at kdwyer@mcall.com. COMPLETE KITCHEN RENOVATION