CHICAGO – April 20, 2017 – Appraisal Institute research finds that homeowners who want a remodeling project to return as much money as possible at closing should opt for smaller projects. A limited kitchen redo, for example, returns a higher percentage of the cost.
“The latest research shows that home improvements with a relatively low cost are most likely to generate a positive cost-to-value ratio,” says Appraisal Institute President Jim Amorin. “Spending big dollars on major renovations doesn’t necessarily equate to a dollar-for-dollar return. In short: cost doesn’t necessarily equal value.”
According to Remodeling magazine’s most recent Cost vs. Value report, the projects with the highest expected return on investment are attic insulation (fiberglass), entry door replacement (steel), manufactured stone veneer and a minor kitchen remodel. Other projects with potential payoffs, according to the report, are garage door replacement and siding replacement.
Amorin encouraged homeowners contemplating renovation projects to compare the planned improvement to what’s standard in the community. “Projects that move a home well beyond community norms are typically not worth the cost when the owner sells the property,” he says.
For most homeowners, however, remodeling isn’t simply about return costs at closing and Amorin says homeowners might consider renovations simply for their personal enjoyment. While it’s nice to gain a solid return on investment, it’s certainly reasonable for property owners to upgrade just to enhance their quality of life, Amorin adds.
The Appraisal Institute offers a free, informational brochure titled “Remodeling & Rehabbing” that provides consumers with advice on home improvement projects.
© 2017 Florida Realtors