Originally published 7/19/2018
Many homeowners are considering a remodeling or addition project in order to increase the enjoyment of their home. Often these projects are undertaken with an eye towards increasing the resale value of the home as well. You may be considering making an improvement to your home and wondering how much more you will make when you get ready to sell your home.
Every year, Remodeling Magazine conducts a national survey of remodeling projects to see what financial return the projects will provide. The report is broken down by region, state, and major city. This year, Savannah has been included as one of the cities in the report.
In this year’s report, there are 4 project types that return over 90% of their cost at resale time.
Interestingly, this highest return is for an insulated garage door replacement, which returns 161.3% of the cost. The next highest return is installing a manufactured stone veneer, which returns 117.5% of the cost. This project involves replacing the bottom third of the existing vinyl siding on the front of the house with a stone veneer. Replacing all of the siding on your home comes in at number three, with a 91.9% return on the cost. (The report does not specify the type of siding used in a complete replacement.) Number four is adding a wooden deck, which returns 91.2% of your investment.
The full report lists 21 different project types covering everything from adding a backyard patio to replacing all of your windows.
When considering a home improvement project, there are more things for you to consider than just the impact on resale value. First, the project returns change every year. For example, in last year’s report, the highest return project was adding insulation to your attic, which gave a return of 123.3% for our region. (Savannah wasn’t separated out last year.) An insulated garage door replacement returned 86.7% last year, about half of this year’s return. A manufactured stone veneer install returned 92.5% last year, a quarter less than this year. A project that makes you money this year may not when it comes time to sell.
A second factor to consider is whether or not you can do the project yourself. Right now, skilled labor is running around $45 or $50 an hour per person in Savannah. For many projects, the labor cost is the larger component of the total cost. If you have the time and the skills, doing a project yourself will save you considerably on the total cost, dramatically changing the return on investment (ROI) for your project. (It will also give you a good excuse to buy more tools!) If you do choose to undertake a project on your own, there are a variety of resources to help you learn how, including websites, books, and YouTube videos. Home Depot and Lowes offer free training seminars on a variety of home improvement projects. Please contact your city permitting department to find out if any permits or inspections are required for the project you are considering. If the project you want to do involves digging, be sure to call in a free locate request to have any utility lines marked before you start. If you accidentally cut into a buried power or gas line, you will have a very bad day! (VBD) Consider carefully how much time the project is going to take you. It WILL take you longer than you expect. No, really. A helping hand or two will speed things up considerably. Do you have any friends that you can enlist or bribe to help you? Pizza power labor (PPL) will cost you much less than a contractor!
Finally, remember that this is about more than just money. This is YOUR home. This is where you live, where you come home to every day. It is important that you enjoy your living space. If you really enjoy outdoor entertaining for example, then go ahead and put in that outdoor kitchen. You can’t put a dollar value on good times with your family and friends.
The National Association of Realtors (NAR) has also produced a remodeling impact survey. The NAR report also considers homeowner enjoyment as well as financial return. NAR assigns a Joy score to the projects listed in their report. According to the NAR report “After remodeling, 75 percent of owners have a greater desire to be in their home. Sixty-five percent have increased enjoyment in their home.” The NAR report lists 8 types of projects with a Joy score of 10, including a new steel front door, and a complete kitchen renovation.
As always, if you are curious about the current value of your home, or if you need recommendations for a handyman or contractor to quote a project for you, the Daniels Team is here to help you.
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