When you think about how much you plan to spend renovating your home, do you think of it as an investment or an expenditure? A nice dinner out is an expenditure, a new car is an expenditure. These items bring the intrinsic value of pleasure and enjoyment but nearly zero return. Now contrast those expenditures with the investment of remodeling. There are intrinsic and extrinsic returns that renovating your home brings. Besides the satisfaction (improved function, improved aesthetic, improved quality) there are values that can be quantified.
A major consideration for many is the home’s resale value. Many variants merge to create a resale value and historically home renovations are very beneficial. Every year, Remodeling magazine publishes a “Cost vs. Value” report. The report compares the average cost for 36 popular remodeling projects with the value those projects retain at resale.
This report is widely recognized in the industry as one of the top publications, customized per market, to give clients and remodeling professionals alike an inside peek into project values. Dr. James F. Molinelli, Architect for ARDO Contracting in Columbia, Maryland spoke highly of the report. “I use Cost vs. Value to show clients that the key projects they are considering will absolutely add value to their home and, in a potential sale, will make their home more attractive to a buyer than comparable houses. It also shows them the portion of the investment they are making that gets amortized over the time they are in the home. When understood in this fashion, and from a dispassionate outside source, people are comforted about their investment/remodeling plans, the value they will receive upon sale in the future, and the real cost of the day-to-day improvement in their lifestyle at home.”
What Dr. Molinelli so eloquently explains to his clients looks like this:
- A complete custom kitchen design and renovation costs 80,000
- The Cost vs. Value reports states you will recoup 55k of it over 5 years through an increase in home value, and historical appreciate adds an additional $3500 per year
- This means that it will cost roughly $3600 per year over 5 years to enjoy all the benefits of a brand new kitchen
Want to see your remodeling project’s Cost vs. Value? You can download the 2015 edition of the report on Remodeling’s website here: Atlanta Remodeling Report Make note of the reports’ description of the ‘Midrange’ and ‘Upscale’ projects and compare the details to the features you want for your remodel.