If you want to remodel to enhance the livability of your current house - for you - great. But these days, Carolyn Bryant, who is a broker for Restaino & Associates Realtors and manager of its Monroe Street branch, is hesitant to recommend her sellers invest in significant home-improvement projects to boost the price point for their house or to hasten its sale.
"The payoffs aren't quite as big now as they have been in the past," notes the broker and branch manager for Restaino & Associates Realtors. National and regional data from Hanley Wood's "Remodeling Cost vs. Value Report" for 2010-11 show declines across the board from last year in percentage of investment recouped for common home-improvement projects. That's true for both midrange and upscale homes, with projects ranging from a major kitchen remodel to window replacement.
One project that does tend to pay off is a complete steel-door entry replacement, which has a recoup rate of 102.1% in the east north central states, including Wisconsin (although that too is down from last year). "In today's market, I think the first thing I'd like to see a seller do is new front doors," Bryant says.
Other common mid-range home improvements - minor and major kitchen remodeling projects, window and siding replacements, basement and attic bedroom remodels, the addition of a master suite, bathroom remodels, garage additions - cluster in a recoup range between 60% and 70% for Madison.
After entry door replacement in recoup rates come minor kitchen remodel, window replacement, deck addition, two-story addition, major kitchen remodel and attic bedroom conversion. (A major kitchen remodel includes new cabinets, countertops, sink, flooring, appliances and lighting, while a minor kitchen remodel would reface cabinets, some appliances, and add new sink, flooring and countertops.)
Vinyl siding replacement is an improvement that may or may not pay off. While upgrading to fiber-cement siding will give a home a more expensive look and will need little in the way of maintenance, Bryant cautions that "if it's the wrong color" it can turn off a buyer immediately.
Don't come up with a way to update your dated kitchen or bathroom on the cheap - that can also turn off a potential buyer, who might prefer marble countertops and a gourmet kitchen but can't justify replacing the brand-new Formica.
On the other hand, if the roofing needs to be replaced and it's within your budget, do it, Bryant says. The same is true for an old or inefficient furnace. But pouring so much into your house that it becomes incongruent to the other houses in your neighborhood probably isn't worth the money.
Each home-improvement project is different, of course - particular to the individual residence and its owner. But the numbers suggest that remodeling projects should be undertaken long enough before you sell that you can recoup some of their value in personal satisfaction. On the other hand, you also incur the risk that your update may be outdated by the time you sell.
Real estate professionals, stagers and designers can give advice before you undertake a remodeling project designed primarily to help sell your home. Enhancements to curb appeal may work as well as or better than major remodels.
For national, regional, and Madison data regarding resale values for remodeling basements, adding or remodeling bathrooms, remodeling kitchens, adding a master suite or sunroom, and other common home-improvement projects, consult www.remodeling.hw.net/2010/costvsvalue/national.aspx.