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Remodeling Resources

The Top 10 Remodeling Projects To Do Prior To Resale

By Melissa M. EzarikBankrate.com

 Expecting to plant a "For Sale" sign in the front yard any time soon? Whether the target date for listing your home on the market is a few months or a few years away -- or whether you simply like to make decisions with an eye toward the future -- you may well be wondering how putting some money into the house now will pay off later.

Thanks to research from Remodeling magazine, homeowners can take some of the guesswork out of project decision-making. The publication's "Remodeling Cost vs. Value Report 2006," which offers national averages as well as regional and city breakdowns of 25 common home improvement projects and their effects on resale value, shows that exterior siding replacement, wood window replacement and minor kitchen and bathroom remodels are tops in the national average of job cost recouped.

Here's the lowdown on the top 10 home improvement projects by resale value from this 19th annual report, which is based on e-mail surveys returned from 2,188 members of the National Association of Realtors. In calculating costs, the report authors considered complete cost-to-construct figures (including labor, material, subtrade contractors and gross profit).

Here are the top 10:

 

1. Replace siding -- fiber cement.
2. Replace siding -- vinyl
3. Mid-range window replacement (wood)
4. Minor kitchen remodel
5. Bathroom remodel
6. Upscale window replacement -- vinyl
7. Mid-range window replacement -- vinyl
8. Two-story addition
9. Siding replacement -- foam-backed vinyl
10. Upscale window replacement -- wood

1. Replace siding -- fiber cement.
National averages reveal that 88 percent of a job costing $13,149 can be recouped with this type of project (based on replacing 1,250 square feet of existing siding with new fiber cement siding, factory pre-primed and pre-painted, including trim).

Homeowners in the following 14 cities could expect to recoup 100 percent or more of job cost.

14 cities that can expect to recoup costs:
Birmingham, Ala. New Orleans
Knoxville, Tenn. Albany, N.Y.
New York Providence, R.I.
Los Angeles Sacramento, Calif.
San Francisco Seattle
Atlanta Baltimore
Jacksonville, Fla. Miami

In the experience of home building and remodeling expert James Carey, who, with his brother Morris, has a weekly radio program and newspaper column called "On the House," people like this type of siding because it's the best and most up-to-date. "Fiber cement siding lasts forever and so does the paint that goes on to it," he says.

 

2. Replace siding -- vinyl
For this mid-range project, which entails replacing 1,250 square feet of existing siding with new vinyl siding and trim, 87.2 percent of a $9,134 job can be recouped. Residents of nine cities could expect to fully recoup costs or more.

In Knoxville, a whopping 159.3% of the $7,562 project cost could be recouped.

9 cities that can expect to recoup costs:
Chicago Knoxville, Tenn.
Albany, N.Y. New York
Providence, R.I. Los Angeles
Baltimore Miami
Richmond, Va.

Still, not everyone is a vinyl siding advocate. "It is flimsy and even though it is easy to maintain, it eventually pits, stains, and fades," Carey says, adding that those conditions can't be repaired. Dean Bennett, president of a design and construction firm based in Castle Rock, Colo., says vinyl siding is frowned upon in his area. "It's rarely seen, and it looks a bit out of place in most areas," he says. "So it would likely not return such a high percent of investment." In fact, Remodeling magazine's snapshot of the Colorado Springs market found that just 49.6 percent of a $10,450 vinyl siding project would be recouped at resale.

3. Mid-range window replacement (wood)
New wood windows, nationally, will return 85.3 percent of an $11,040 project. The project includes replacement of 10 existing 3-by-5-foot double-hung windows with insulated wood replacement windows, exterior clad in vinyl or aluminum, as well as wrapping existing exterior trim as required to match without disturbing existing interior trim.

In these nine market areas, 100 percent or more of costs could be recouped.

9 cities that can expect to recoup costs:
Grand Rapids, Mich. Knoxville, Tenn.
Albany, N.Y. Burlington, Vt.
Providence, R.I. Los Angeles
San Francisco Miami
Tampa, Fla.

There's a triple attraction with this type of window replacement, Carey says. "Wood windows covered with vinyl give you strength, energy efficiency and low maintenance."

 

4. Minor kitchen remodel
With a $17,928 mid-range project, 85.2 percent of the cost could be recouped, the survey shows. The project is based on a functional-but-dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leaving cabinet boxes in place but replacing fronts with new raised-panel wood doors and drawers, including new hardware, as well as replacing the wall oven and cook top with new energy-efficient models, replacing laminate countertops, installing a mid-priced sink and faucet, repainting trim, adding wall covering and removing and replacing resilient flooring.

Of the market areas studied, these 11 could offer 100 percent or more of costs recouped for the project.

11 cities that can expect to recoup costs:
Albany, NY New York
Albuquerque, N.M. Boise, Idaho
Los Angeles Sacramento, Calif.
San Francisco Seattle
Baltimore Miami
New Orleans

5. Bathroom remodel
Homeowners across the country could expect an average 84.9 percent return on a $12,918 mid-range investment. The project includes updating an existing 5-by-7-foot bathroom by replacing all fixtures with a 30-by-60-inch porcelain-on-steel tub with ceramic-tile surround, new single-level temperature and pressure-balanced shower control, standard white toilet, solid-surface vanity counter with integral double sink, recessed medicine cabinet with light, ceramic-tile floor and vinyl wallpaper.

Homes in these 11 market areas could recoup 100 percent or more of project costs.

11 cities that can expect to recoup costs:
Knoxville, Tenn. Albany, N.Y.
Albuquerque, N.M. Boise, Idaho
Phoenix Los Angeles
San Francisco Portland, Ore.
New Orleans Seattle
Miami    

It doesn't surprise Carey that the kitchen and bath are represented in the top five list. In fact, he considers the kitchen and master bath to be the two most important rooms in the home for improving value. Gregg Hicks, director of marketing for Reliableremodeler.com, agrees. "While there are other projects which can have the same effect, the results likely won't compare to these two types of remodels," he says.

6. Upscale window replacement -- vinyl
The national average return is 84.7 percent on a $13,149 project involving replacement of 10 existing 3-by-5-foot double-hung windows with insulated, low-E, simulated-divided-lite vinyl windows with a simulated wood-grain interior finish, custom-color exterior finish and trim exterior to match existing.

Recouping at least 100 percent of costs is typical in these 9 cities.

9 cities that can expect to recoup costs:
Birmingham, Ala. Knoxville, Tenn.
Albany, N.Y. Albuquerque, N.M.
Providence, R.I. Los Angeles, Calif.
San Francisco, Calif. Miami, Fla.
Orlando, Fla.

Carey sees this project type as a "good alternative if you can't afford wood frames." And Bennett points out that even nice vinyl windows aren't as good as aluminum-clad wood windows; in his experience, fiberglass windows would be more upscale than vinyl. However, he adds, it's certainly important from the perspective of prospective buyers that a homeowner replace windows that need to work or look better.

7. Mid-range window replacement -- vinyl
For a $10,160 project, homeowners could expect to recoup 83.7 percent as a national average. The project entails replacement of 10 existing 3-by-5-foot double-hung windows with insulated vinyl replacement windows, and wrapping existing exterior trim to match.

Homeowners should be able to get 100 percent of the investment back at resale for this project in these five cities.

5 citites that can expect to recoup costs:
Cincinnati Albany, N.Y.
Los Angeles San Francisco
Miami

8. Two-story addition
Homeowners completing a $105,297 project consisting of a first-floor family room and a second-floor bedroom with full bath in a 24-by-16-foot two-story wing over a crawlspace could expect to get back 83.2 percent at resale nationwide. But in these market areas one could expect to recoup 100 percent or more of this investment.

Homeowners should be able to get 100 percent of the investment back at resale for this project in these six cities.

6 cities that can expect to recoup costs:
Boise, Idaho Los Angeles
San Francisco Seattle
Miami Washington, D.C.

According to Carey, additions that don't look like additions are what will get homeowners' money back. An addition that "sticks out like a sore thumb" is what to avoid.

 

9. Siding replacement -- foam-backed vinyl
Spending $11,139 on this project would mean an average of 83.1 percent recouped later, assuming it involves replacing 1,250 square feet of existing siding with new foam-backed vinyl siding, including factory trim at all openings and corners.

Homeowners in these metro areas could expect to recoup at least 100 percent of the project cost.

7 cities that can expect to recoup costs:
Knoxville, Tenn. Albany, N.Y.
Providence, R.I. Los Angeles
Baltimore New Orleans
Miami

10. Upscale window replacement -- wood
For a $16,910 project involving replacing 10 existing 3-by-5-foot double-hung windows with insulated, low-E, simulated-divided-lite wood windows, with a stained hardwood interior finish and an exterior finish of custom-color aluminum cladding, 82.5 percent could be recouped at resale.

Homeowners can expect to see 100 percent or more could be recouped in these six cities.

6 cities that can expect to recoup costs:
Knoxville, Tenn. Albany, N.Y.
Albuquerque, N.M. Los Angeles
San Francisco Miami

"The bottom line on windows is that they are very expensive," Bennett says. "They are issues of comfort and aesthetics, not ROI." Different projects to improve the weather tightness of a house, such as insulation, he adds, would result in a better return on investment.

As for what to avoid if resale value is top of mind, home office remodels and sunroom additions recoup the lowest percentage of cost with a national average of 63.4 percent and 66.3 percent recouped, respectively. While not all of the above projects would increase the quality of life for a current homeowner, those with an eye toward resale would do well to make project choices accordingly.

 

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