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RSS FeedDenver Remodeling: Which Projects Pay Off? |
Posted at Denver Real Estate Blogspot by Judith Clausen
Dec. 18, 2007
Categorized in: Denver Remodeling Costs
If you’re thinking of buying a house that needs some remodeling, the top two projects that will recoup at least 75% of your outlay are an attic bedroom remodel (78.9%) and the addition of a wood deck (78.2%). A major upscale kitchen remodel on average will cost you $106,434 and you’ll recoup 69.6% of the cost when you sell. A basement remodel costs $56,476 and will yield $41,656 at sale, a 73.8% recovery. Recovering remodeling costs isn’t the primary reason homeowners take on a remodeling project. But it’s a factor to be considered in today’s market. If you plan on staying in your home the cost can likely be recovered in a few years with Denver’s appreciation increasing every year from 1988 to 2005.[i] [2006 showed the first price drop in nearly 20 years, but 2007 is expected to show rising values, though slight.] If you’re planning to fix up your house and move within the next year then you probably don’t want to engage in a costly remodeling project. The best projects for resale are remodeling your kitchen or bathrooms, and adding a bathroom as long as it doesn’t reduce the number of bedrooms. In other words, you don’t want to convert a small bedroom into a bathroom. No matter how small the bedroom it’s still a bedroom, and buyers want bedrooms, at least three.
But for those who do want to remodel, which projects will be worthwhile to take on? According to the National Association of REALTORS® annual Profile of Buyers Home Feature Preferences 2007 the addition of whole house air conditioning is a top priority. If the house doesn’t have it, buyers want it. The cost runs about $2,000 to $4,000, depending on the size of the house. If the house doesn’t already have a forced air heating system, the cost to put in ductwork can be prohibitive. In Denver’s climate an acceptable alternative is evaporative cooling (“swamp” cooler).
A minor midrange kitchen remodel will cost $20,512. For a 200 sq. ft. dated kitchen, you’ll be able to reface your cabinets and drawers (30 linear ft.) with new raised wood doors and drawer fronts, replace old hardware, replace laminate countertops and vinyl floors, replace a wall oven and cooktop with energy efficient models, and install a new moderately priced sink and faucet. You’ll be able to paint the trim and add wall covering, which all should make for a modest improvement and a better kitchen.
An in-between midrange major kitchen remodel would give you semi-custom wood cabinets, a 3 by 5 island, laminate countertops, a standard double stainless steel sink with a standard single-lever faucet, an energy efficient wall oven, cooktop, ventilation system, built in microwave, dishwasher, garbage disposal and custom lighting. You’ll get new vinyl flooring and a new paint job, including trim. It will run you $52,816 and you’ll recoup 70.2% when you sell within a year.
If you want to go all out, you can have an upscale major kitchen remodel for $106,434 which will includetop of the line cherry cabinetry with built-in sliding shelves, stone countertops with glass tile backsplash, a built in refrigerator and cooktop and a 36” commercial grade range with a vent above and a built in warming drawer. A trash compactor, built in microwave/convection oven combo, a high end undermount sink with designer faucets and a built in water filtration system are included. New lighting including general, task and under cabinet lighting will be a plus, and the new cork floor will make standing while cooking or cleaning up a dream. The cost will be $106,434 and you’ll be able to recoup 69.6% of the cost if you have to sell within a year.
Other projects have varying rates of cost recovery.[ii] The chart below shows projects many Buyers Advantage clients have expressed interest in. The highest value project across the country for the last few years is a minor kitchen remodel – best for resale and best for comfortable living.
|
Project - All Midrange
|
Cost
|
Cost Recovered
|
|
Basement Remodel
|
$56,476
|
73.8%
|
|
Bathroom Addition
|
35,409
|
56.6%
|
|
Bathroom Remodel
|
15,171
|
67.8%
|
|
Roof Replacement
|
14,238
|
55.1%
|
|
Window Replacement (vinyl)
|
9,669
|
72.4%
|
|
Window Replacement (wood)
|
10,578
|
75.9%
|
A quick addition: See Market Watch's article on remodeling published December 31, 2007.
[i]THE REAL ESTATE CYCLE IN 2006: Evaluating Market Position, Identifying Turning Points and Constructing Scenarios Christopher L. Cagan, Ph.D., Director of Research and Analytics, First American Real Estate Solutions
[ii]All data from © 2007 Hanley Wood, LLC. Reproduced by permission. Complete city data from the Remodeling 2007 Cost vs. Value Report can be downloaded for free at www.costvsvalue.com
1. RE: Denver Remodeling: Which Projects Pay Off?