Considering all the TV shows about flippers who extensively remodel homes, one would be forgiven for assuming that it usually pays off to extensively remodel the home they are living in, that you will get your money out when you sell.
In those TV shows, there is often the designer who wants to remove walls, rearrange floor plans, and use upscale design elements. Sometimes there is the cheapskate who wants to just paint the existing kitchen cabinets. The data shows that the cheapskate is closer to being correct.
Zonda Media publishes Cost versus Value information for various remodel projects. It turns out that most have a negative rate of return. For each dollar you spend on remodeling, if you resell immediately, you will get less than a dollar back out of those projects.
There are a few exceptions.
One remodelling project that has a positive rate of return, according to the latest numbers for Spokane, is replacing an old garage door with a nicer new four-section garage door on new heavy-duty galvanized steel tracks, reusing the existing opener. This project has a cost of about $4735 and resale value of about $5267, according to Zonda.
Another project that has a positive rate of return is replacing siding with new fiber-cement siding (e.g., HardiPlank GAF, Nichiha, Plycem). Assuming 1,250 square feet, this has a cost of $19,468 and resale value of $20,809 according to Zonda. This has not always been true. A few years ago, this would have had a negative rate of return.
Next down on the list is replacing the siding with new vinyl siding. Again assuming 1,250 square feet, this has a cost of $18,077 and resale value of $18,459 according to Zonda. Vinyl siding is almost maintenance free but can melt or crack or fade in color or be damaged by hail. There are different thicknesses and different qualities. Fiber cement siding may be a better choice for a slightly higher price. Much depends on the price of oil. When oil is cheap, vinyl siding is less expensive. When oil is expensive, the price of vinyl siding approaches the cost of fiber cement siding.
Almost all other remodelling projects have a negative rate of return.
Adding some manufactured stone veneer is an almost breakeven project with a cost of $11,710 and resale value of $11,098 for about 300-square-foot continuous band along bottom third of the street-facing façade of the house.
Of all the kitchen remodels you can do, a minor one has the best rate of return. Leaving the cabinets but replacing the doors and fronts, replacing the hardware, replacing the appliances, new laminate countertops, new midpriced sink and faucet, new resilient flooring, new paint, has a price of about $27,968, and a resale value of $23,793, for an 85% value versus cost. For a major kitchen remodel, midrange, your resale value is only 44% of the cost. An upscale bath remodel has a resale value of only 36% of the cost. A new asphalt roof is a better investment as it has a resale value of about 75% of the cost. Replacing windows with new vinyl windows is also a better investment than a bath or kitchen remodel with a resale value of about 68% of the cost, plus potential energy savings.
With any remodel project, it is advisable to obtain multiple quotes and to check reviews of contractors, and to make sure they are licensed and bonded. Your particular project may cost more than the examples above.
When preparing a house for resale, it is often best to focus on decluttering, cleaning, painting over wild vivid colors with neutral colors, and curb appeal items (garage door, siding, painting the front door, perhaps replacing windows if you will live in the house for some time before moving). Major bathroom and kitchen remodels usually do not pay out. They should not be done unless you plan on living in the house for some time and want to enjoy the upgrades yourself.