Each year, Remodeling Magazine works hard to produce a Cost vs. Value Report in which they give you a good idea of the best home renovations from the perspective of resale value. In other words, if you had $10,000 to spend on a remodeling project and wanted the best financial return for your dollar, this list would give you a good idea of where you should spend it.

Remodeling takes it one step further and gives you the ROI based also on your geographic area because different areas enjoy different trends, styles, and comforts. The best example has to be a pool. A pool’s value is significantly higher in temperate climates like the Mid-Atlantic and South Atlantic and less valuable in areas that are cooler like the New England states. For the sake of simplicity, I’ll just compare national figures because that’s what they used to do in their surveys.

It’s amazing what happens in one year.

Changes since 2006

In the 2006 Best Home Renovations List, you had nearly everything on the list come in at above 80% return. Of the eighteen listed renovations, half gave a return of over 90% (two were profitable!). This year? Good luck finding anything with a return above 90%… the highest is a Wood Deck Addition at 85.4% (last year it was 90.3%). Here’s the 2005 Best Value Home Renovations Revisited post for further comparison from the year before.

Top 5 Best Value Renovations

Nationally, the top five were the wood deck addition (85.4%), siding replacement (83.2%), minor kitchen remodel (83%), and wood (81.2%) and vinyl (79.3%) window replacement. As you can see, former #1 minor kitchen remodel was third.

We recently replaced our roof because it was over 25 years old and because it had begun to leak. The roof replacement in the South Atlantic region (apparently Baltimore, MD is in the South Atlantic) had an estimated cost recoupment of 72% versus 67.4% nationally. Does that really affect our decision? We replaced it because it was leaking!

I don’t know many people doing home renovations these days with the housing market and the economy the way it is, which could explain the slow decline in ROI of renovations but it’s always good to keep these sorts of lists around if you have some cash burning a hole in your pocket.

(Photo: wili)

Forbes produced another list of the best home renovations/improvements in terms of their resale value and I thought it would be interesting to compare this list to lists I’ve seen, and blogged about, in the past. With all of these I looked only at the National Average values, since that’s what I’ve always looked at, and tried to pair them up with comparable renovations in past lists. The data they used is from Remodeling magazine’s yearly assessment/survey/magic but one of the lists I used was from a handyman-type site and not a magazine about remodeling.

Overall, Remodeling Magazine makes it sound like a lot of the renovations you make hold a lot of its material and labor value whereas the handyman site doesn’t paint as rosy of a picture. I’m inclined to believe that Remodeling magazine is at least somewhat biased, knowing nothing about it except that it likely sells advertising space to businesses in the remodeling industry, so I’d mark down their resale values a little bit. From a buyer’s perspective, which I was a year ago, I do know that more bedrooms and bathrooms the better (to a point, I’m only one person… I don’t need 8 bathrooms, I don’t even have 8 friends) but a renovated home office means nothing to me. So again, as I approached the other list, I believe the relative rankings of renovation value retention is likely correct though the actual values are subject to a multitude of factors a simple study can’t capture.

The comparative table is available after the jump. (oh, and if you’re going to replace your windows, you might be able to get a tax credit for it because of the latest energy bill)
(read full article…)

It does appear that the real estate market has started to slow down, as expected, so it comes as no surprise that cnn/money has an article listing six tips for all you sellers out there. One thing I think deserves mentioning is that if you want to be successful selling your property for as much as possible, you should’ve been doing all these tips in the sizzling hot market anyway.

Tip 1. Improve Curb Appeal

These are the first impressions of your home, mow your lawn, paint your exterior if it needs it, trim the bushes, and move any trash cans or other debris away. Remember that many times people will be surfing a real estate page and one of the only pieces of physical evidence they see at that point is the photo of the front of your house.

Tip 2. Clean Up and Rearrange Inside

They suggest that you remove your own personal touches so you should move pictures, trophies, diplomas, and anything that makes the home “yours” and not “theirs.” If you can handle it, rearrange or remove some of your furniture so there is more open space, which in turn, will make your place seem bigger. While this is a little harder if you’re still living there, the extra hard work could pay off. If you have already moved, rent some furniture to put in the rooms so it isn’t just an empty space. (Their Tip #3). Also, consider doing a little work such as touching up some of the paint in some rooms because it’ll give it a much better feel.

Tip 4. Smell Test

Own a pet? You might want to consider finding him or her a temporary home while you’re selling. Obviously, clean out all the trash and refrain from smoking. You might want to consider repainting rooms in which you have smoked (if you do) to mask the smell of smoke, though that will take a lot of coats of paint.

Tip 5. Pick A Good Realtor

In a sellers market you can afford to have a weak Realtor, but not now. They suggest reading reviews on Homethinking.com and Hungryagents.com to find the best one.

If you’re thinking about some major remodeling jobs to increase the potential selling price of your home, you may be interested to read about the Best Home Value Renovations and an update to the Best Home Value Renovations.

Back near the end of July of ‘05, I blogged about an article about the best home value renovations which revealed that the only even money proposition was the addition of a second bathroom. A recent report by the National Association of Realtors and Remodeling magazine revealed that some home renovations actually earned you a profit.

A “mid-range bath remodeling” would cost the average homeowner $10,499 but boosts the value of your home by $10,727, or 2.2%. “Upscale residing” would cost you $10,393 but add $10,771 in value, or 3.6%. This is a slight improvement over the numbers revealed in my previous post about the best home renovations (by value).

Some other notable improvements were the conversion of an attic into another bedroom suite (bed and bath), which increased value by 93.5% of the cost, a deck increased value by 90.3%, a home office a mere 72.8%. However, all the percentages are much higher than previously reported home renovation values by a significant percentage. An attic bedroom was listed at 90%, a deck listed at 80%, and a home office was originally listed at 60%. It only fuels the debate as to the actual return value of a particular renovation but the relative return values are still the same (attic bedroom is better than a deck which is better than a home office, the same as before).

The report also revealed what we all probably understood - renovations are valued differently in different parts of the country. A window replacement was valued at 103% out west but only 83.7% in the south. A bath replacement garners an incredible 111.9% in the west, 104.4% in the east, but only a stingy 89.5% in the Midwest. It’s not entirely obvious (at least to me) why this is the case but it’s good to know.

(Photo: Jo Illingworth)