Thursday, December 16, 2010

Home Owners Recoup More with Exterior Replacement Projects, REALTORS® Report

Home Owners Recoup More with Exterior Replacement Projects

December 16, 2010 - The latest cost vs. value report on remodeling a home is now out. What will get you the biggest bang for your buck? A steel entry replacement door averaged a return of 102% of what you spend. Most of the other projects will return you less than 100% of what it costs you, according to this report.

 This report comes out each year and gives the average return on investment for many common home remodeling projects across the US, and is broken down by region. This year, remodeling projects done in New England don't return as much as project done in some other parts of the country, such as the west coast and south Atlantic coast. Lower labor costs seem to make the difference in the southeast, while higher return values is the reason that the west coast's remodeling projects net more money at resale.

Now the problem I have with the report is not so much the value returned, but with the costs of the projects. Maybe that's because I do the majority of my own remodeling projects, or maybe because I get more than one estimate when it comes to hiring a contractor.

For example, I had an exterior fiberglass door installed in my home last year, replacing the original cracked wooden one. According to the report, for the New England area, I should have paid $3,662 for the project. I purchased a good quality door for $349.00 at Home Depot, and the labor to remove the old door and install the new one was $500. I got 3 estimates for labor and this was the middle one. So the total cost for the job was $849, a far cry from $3,662. The value of replacing my front door is $2,079, a figure I would agree with. That means my return on investment (or cost vs. value) is 245%! Quite a difference from the 56% return that the Cost vs. Value report states. 

I believe that many of the cost estimates are overstated. The cost for replacing a roof is put at $23,232. That is around the estimate I got for replacing my roof...but included adding on a full dormer in the rear and 2 doghouse dormers in the front of the house! Just replacing my roof (admittedly, not a large job because it is a cape) was $4,500 to $7,000 (4 estimates received) including removing the existing 2 layers. I did have one client pay over $20,000 for a new roof, but that included removing and disposing of the existing clay tile roof - not an easy job. Yes their are roof out there on McMansions that will easily run in excess of $20,000, but that is not the norm. Most roof replacements I have seen have been in the neighborhood of $5,000 to $15,000. Then again, replacing your roofing isn't really an upgrade. But in a home buyer's mind your home is significantly less valuable if the roof has to be replace within the next few years. They just expect to buy a home with a good roof that will last for years.

Some of the biggest returns are changes made on the exterior of the house. First impressions are extremely important when selling a property, and if you have pealing paint, a cracked front door, shingles falling off the roof and a rotted garage door, the buyers may never go inside to see your beautiful newly remodeled kitchen and bath.

If your home needs some updating, read the Cost vs. Value Report. It contains some good information. But remember that you can probably do better than what is claimed by doing the work yourself, or by making sure you get multiple bids/estimates for any remodeling project.

 Jim Armstrong

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