Home Improvements: Bad Investment?

Are home improvements a bad investment? Maybe, if you are planning to sell your home soon.

According to Remodeling magazine's 2014 Cost vs. Value trends, only 66.1 percent of home improvement costs are recouped on average.

Remodeling's website compares the average cost for 35 popular remodeling projects in different regions throughout the U.S. It then compares improvement costs versus the increased value to your home.

What are the Riverside region's 2014 Cost vs. Value results for popular projects? For a bathroom addition, the average job cost is $43,232. But the resale value is only $27,367, meaning you only recoup 63.3 percent of your investment. The same holds true for a major kitchen remodel  (Cost: $59,965; Value: $51,833; Ratio: 86.4 percent), and vinyl window replacement (Cost: $10,963; Value: $9,436; Ratio: 86.1 percent), where you only recoup a fraction of the cost.

Of course, what the website’s Cost vs. Value results don’t include is the impact the improvements will have on home buyers attitudes. While your home’s value may not increase as much as the cost of improvements, it’s possible that the improvements may help you sell your home sooner rather than later. Or that the improvements motivate a buyer to choose your home over your neighbor’s. 

One other point to keep in mind about these Cost vs. Value numbers: They assume you are hiring a licensed contractor to perform the improvements. So if you are a handy do-it-yourselfer, then the cost of your home improvement project may be well worth the investment.

Looking for inexpensive ways to entice buyers to choose your home? Then check out Lowe's Top Ten Home Improvement Tips.

Bill Burchard, Broker, REALTOR®
3B Realty
BRE# 01864774
Bus: 951-347-3818
Email: Bill@My3BRealty.com