A home improvement renovation can make your home a happier place. But there are many projects where hours of toil and thousands of dollars don’t do much for your home’s resale value.
In fact, in some cases, you’ll recoup barely half of what you spent on your investment, according to Remodeling magazine’s 2019 Cost vs. Value Report.
The hard truth is that a home upgrade is almost always a money loser, according to Remodeling’s findings. None of the renovation projects cited by the Remodeling report recoup all of their costs, let alone “add” value that will pay off when you sell the home.
Of the projects listed in the report, the best investment you can make is to replace your garage door and recoup about 97.5% of the cost, on average.
But you also can do much worse. The following five projects are especially unlikely to return much for all that you put into them. Of all the projects in the report, they offer the lowest returns:
- Master suite addition (upscale, or higher-priced, version): 50.4% of the cost recouped, on average
- Backyard patio (midrange, or standard, version): 55.2%
- Bathroom addition (upscale): 58.1%
- Master suite addition (midrange): 59.4%
- Major kitchen remodel (upscale): 59.7%
Why are remodeling projects such money losers? According to Remodeling magazine:
“Due in large part to sharp increases in material costs over the past summer, the percentage of costs recouped is trending downward for all the replacement projects.”
Getting the most bang for your home remodeling bucks
Fortunately, not all remodeling projects are as costly as those cited above. As we noted in “These 10 Home Improvements Offer the Highest Returns,” exterior replacement — or “curb appeal” — projects tend to net the best returns.
That includes the aforementioned garage door replacement and, for further examples, replacing vinyl siding with manufactured stone veneer and adding a wood deck.
Finding the right contractor also can help trim costs — as long as you don’t go overboard trying to save money. As we note in “11 Tips for Hiring a Home Improvement Contractor You Can Trust“:
“When asking several contractors to make competitive bids, be wary of any that come in far lower than the rest. A little lower is fine, but the “too-good-to-be-true” rule applies here. There’s probably something wrong with a radically lower bid. It often means there will be expensive surprises later in the project.”
Would you undertake a home remodeling project if you knew you would not recoup the cost? Sound off in comments below or on our Facebook page.
Earn more interest on your savings
Are you earning as much interest on your savings as you could be? Grow your savings faster with banks offering rates that are significantly higher than the national average. Find the best rates and start earning more interest on your savings by using the Money Talks News savings account and CD comparison tool.