WHEN YOU SELL your home, you might make back 50% to 80% of the money spent on recent remodeling projects. For proof, check out Remodeling magazine’s annual survey at CostvsValue.com. The survey is based on selling your home within a year of making the improvements.
For example, according to the 2020 survey, a midrange major kitchen remodeling costs an average $68,490, but you might recoup just $40,127, or 58.6%, if you sell soon after. The longer you wait to sell, the less you are likely to recoup, because your improvements will no longer look spanking new.
In other words, as with homeownership in general, remodeling is part consumption and part investment. With that in mind, you should go ahead with remodeling projects only if they will give you pleasure commensurate with the dollars spent and not because you think they will boost your home’s value. That said, if you’re concerned about resale value, you should probably avoid fixing up your home to the point where it is fancier than most houses in the area. Instead, you are more likely to get a fair price if your property is comparable to others in the neighborhood.
In the market for a new home? Because remodeling projects tend to be money losers, you might look for a home that has been fixed up to your liking. That way, you may be able to buy the owner’s home improvements at a discount.
Next: Rental Properties
Previous: Assessing the Market
Article: Window Dressing