Cost vs. Value: Which Home Improvements Offer the Highest ROI in 2017?

Posted by Matthew T. Smoot on January 27, 2017 at 1:10 PM


 
 
With the many different projects reported annually in Remodeling Magazine's Cost  vs. Value Report, not much has changed from last year...and that's not a bad thing. The 29 projects found on this year's report paid back an average of 64.3 cents on the dollar in resale value. Looking at the 24 most tracked projects (projects consistently tracked for the last six years), their payback for 2017 was also 64.3 cents-only three-quarters of a penny higher than 2016 projections.
 
Why the little change? Simply put: the differences in underlying numbers was minimal year-to-year. The average cost for those 24 projects rose a meager 3 percent, while the value that real estate professionals put on said projects only rose 4.2 percent. Minor gains, yes, but we'll take what we can get.
 
Recent and long-time trends continued, reports Remodeling. Curb appeal projects like changes to doors, windows and siding garnered a higher ROI than work done inside the home. Replacement projects, like doors or windows, scored higher among real estate pros than did remodels.
 
On a national scale, the top five projects with the greatest ROI in the report's "midrange" cost category are:
  1. Attic Insulation (Fiberglass) (107.7% ROI)
    Average Cost: $1,343
    Average Resale Value: $1,446
  2. Entry Door Replacement (steel) (90.7% ROI)
    Average Cost: $1,413
    Average Resale Value: $1,282
  3. Manufactured Stone Veneer (89.4% ROI)
    Average Cost: $7,851
    Average Resale Value: $7,019
  4. Minor Kitchen Remodel (80.2% ROI)
    Average Cost: $20,830
    Average Resale Value: $16,699
  5.  Garage Door Replacement (76.9% ROI)
    Average Cost: $1,749
    Average Resale Value: $1,345
The top five projects with the greatest ROI in the report's "upscale" cost category are:
  1. Garage Door Replacement (85.0% ROI)
    Average Cost: $3,304
    Average Resale Value: $2,810
  2. Entry Door Replacement (fiberglass) (77.8% ROI)
    Average Cost: $3,276
    Average Resale Value: $2,550
  3. Window Replacement (vinyl) (73.9% ROI)
    Average Cost: $15,282
    Average Resale Value: $11,286
  4. Window Replacement (wood) (73.0% ROI)
    Average Cost: $18,759
    Average Resale Value: $13,691
  5.  Grand Entrance (fiberglass) (70.1% ROI)
    Average Cost: $8,358
    Average Resale Value: $5,855
Regionally, the Pacific division (California, Oregon, Washington, Alaska and Hawaii) saw an average payback of 78.2 percent for all projects, with 10 projects posting cost-recouped levels of at least 90 percent. The East North Central states of Ohio, Indiana, Michigan, Illinois and Wisconsin, however, saw an average of just 54.9 percent, with no single project offering a payback of as much as 80 cents on the dollar.
 
At the other end of the spectrum are projects with the lowest returns on investment-improvements generally not in demand by the market. Again on a national scale, the five projects with the lowest ROI in the "midrange" cost category are:
  1. Bathroom Remodel (64.8% ROI)
    Average Cost: $18,546
    Average Resale Value: $12,024
  2. Master Suite Addition (64.8% ROI)
    Average Cost: $119,533
    Average Resale Value: $77,506
  3.  Backyard Patio (54.9% ROI)
    Average Cost: $51,985
    Average Resale Value: $28,546
  4.  Backup Power Generator (54.0% ROI)
    Average Cost: $12,860
    Average Resale Value: $6,940
  5.  Bathroom Addition (53.9% ROI)
    Average Cost: $43,232
    Average Resale Value: $23,283
The five projects with the lowest ROI in the "upscale" cost category are:
  1. Major Kitchen Remodel (61.9% ROI)
    Average Cost: $122,991
    Average Resale Value: $76,149
  2. Master Suite Addition (59.9% ROI)
    Average Cost: $250,687
    Average Resale Value: $150,140
  3. Bathroom Remodel (59.1% ROI)
    Average Cost: $59,979
    Average Resale Value: $35,456
  4. Bathroom Addition (57.1% ROI)
    Average Cost: $81,515
    Average Resale Value: $46,507
  5. Deck Addition (composite) (56.4% ROI)
    Average Cost: $39,339
    Average Resale Value: $22,171

Matthew T. Smoot-Your "Whatever it Takes" REALTOR® When You List with Smoot, You Sell with Smoot

With over 9 years in the business I offer my clients the most comprehensive representation in Maryland.  Not only am I a REALTOR, but I also hold a Broker's license, which is the highest and most specialized license a REALTOR can hold.  Customer Service is my Priority, Selling Houses is My Goal!  Contact me for any and all of your Real Estate Needs.  443-504-8930

 

 

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