Remodelling Magazine and REALTOR Magazine have published a survey that explains which home improvements pay off when you sell your home - and which don’t. They do this survey on a national basis, and group their results by region (Pacific, Mountain, New England, South Atlantic, etc.). It’s a broad survey, that looks more closely at 60 US cities. Phoenix is a target city for the report, so more specific data is available for Phoenix.
In Phoenix, the survey reports that the best ROI for a Phoenix home is with a Bathroom Remodel. The average project costs $11,673, and when the home has sold yields a resale value of $12,670. This bathroom Remodel project consists of updating a 5×7 ft bathroom by replacing all of the fixtures to include a new 30-by-60 inch porcelain-on-steel tub; adding new 4×4 ceramic tile tub surround; new faucets; new standard white toilet; a solid surface counter with double sinks; ceramic tile flooring; and wallpaper.
Note the resale value is higher than the cost of the project, giving a 108.5% return on investment. For all of the remodel projects noted in the survey, this is the only one that increases resale value for the average home. However, other projects give pretty good returns including:
| Two-Story Addition | 94.7% |
| Window Replacement | 90.2% |
| Major Kitchen Remodel | 89.4% |
| Roofing Replacement | 88.9% |
| Bathroom Addition | 86.1% |
Updates that are less financially beneficial include:
| Sun Room Addition | 66.5% |
| Home Office Remodel | 68.7% |
| Vinyl Siding Replacement | 76.4% |
Overall, the average remodel project has a return of around 80%, meaning if you are considering remodeling your home, in the long run, it’ll cost you 20 cents on the dollar. Plus, you get all of the benefits of living with your newly updated home until you do decide to sell.
As I mentioned in an earlier post about homes of the future being more luxurious, updating your home now may be even more important in the future, when it comes time to sell. And armed with this data it sure makes a lot of financial sense too.
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