As a real estate agent and trusted adviser, clients likely often reach out and ask your thoughts on home improvement projects to get a better sale price for their home.
Lucky for you, Remodeling Magazine just released its 2017 Cost Vs. Value report to help you answer these questions.
The report “compares average cost for 29 popular remodeling projects with the value those projects retain at resale in 99 U.S. markets.”
Use the findings below to help clients who are looking to add value to their home or get the most for ROI for their fix-and-flip.
Top performers: MidrangeThe report showed that the average properties within the median range had three of the five projects with the highest returns. These three projects also had the lowest cost incurred.
None of them had a higher performance than last year due to the material and labor costs rising faster than the deemed value.
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Projects with minor remodeling work such as replacing windows and doors yielded a higher profitability in comparison to those that required internal work, such as cupboards and countertops.
Below is a summary of the top five midrange projects outlining the scope of work and the average cost, resale value and return on investment:
Project details Average cost Average resale value Average ROI Installation of attic using fiberglass $1,343 $1,446 107.7% Steel entry door replacement $1,413 $1,282 90.7% Manufactured stone veneer $7,851 $7,019 89.4% Minor kitchen refurbishing $20,830 $16,699 80.2% Replacement of garage door $1,749 $1,345 76.9% Top performers: UpscaleIn comparison to projects within the midrange, properties that underwent significant renovations such as grand entrances, family room, high-end bathroom renovations, opulent master suites and multistory additions had the most significant year over year increase, rising from 5.6 percent to 7.4 percent.
This is as a result of the value exceeding the cost incurred to renovate the property. Consequently, more experienced investors are now opting to invest in higher value properties as the market recovers.
Below is a summary of the top five upscale range projects outlining the scope of work and the average cost, resale value and return on investment:
Project details Average cost Average resale value Average ROI Garage door replacement $3,304 $2,810 85% Fiberglass entry door renewal $3,276 $2,550 77.8% Vinyl window replacement $15,282 $11,286 73.9% Wood window replacement $18,759 $13,691 73% Fiberglass grand entrance $8,358 $5,855 70.1% LocationAnother factor for consideration is the location of the property. Location impacts both the cost and the value of the property. This is on the basis of supply and demand. For areas of higher demand, there will commonly be a higher return on investment.
Overall profitabilityThe Cost Vs. Value report found that there was an average return of 64.3 cents for every dollar spent.
The potential return of a project will depend on several factors including the nature of the project, upscale versus midrange, the location of the property as well as the base cost incurred. But there is money to be made by smart homeowners and flippers on the sale of their home.
Alana Douglas is the owner of Realtor Douglas in Imnhaha, Oregon. Follow her on Twitter or Google-Plus.
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