During economic downturns, home improvement stores often see increased sales as homeowners decide to upgrade their existing homes rather than buy new ones. Unfortunately, taking on those common home improvement projects may not return as many dollars as you hoped.
Replacing the front door of your Atlanta home may be the most cost efficient remodeling project you can make. That's according to the annual "Cost To Value" survey conducted by Remodeling Magazine in conjunction with data supplied by the National Association of Realtors. The project involves removal and replacement of both the existing door and jamb and replacing the lock and entry set. The new door is steel clad and contains dual-pane half-glass panels.
According to numbers representing the Atlanta metro real estate market, such a project would cost just under $1,150, but would add only $1,099 to your home's projected resale value. Of all the remodeling projects listed, this was the only one that recouped close to 100 percent of its cost.
Construction cost figures include labor, material, and subtrade expenses, plus industry-standard overhead and profit, and reflect local commodity and labor costs. Resale estimates are based on responses to a poll of appraisers, agents and brokers.
The 2010-11 edition of the report found that a typical garage-door replacement project in the Atlanta area cost around $1,245 and recouped about $1,039 -- about 83 percent -- of that cost upon resale. In this case, it was specified that the motorized door opener was not replaced, but re-used.
The next three highest scoring home remodeling projects should be no surprise to Atlanta residents:
- Addition of a 16-by-20-foot pressure-treated wood deck with a built-in bench and planter is projected to cost about $10,500, but would recoup only about $8,018 -- only 77 percent -- at time of sale.
I found this to be the most surprising data of the Atlanta survey, based on my personal selling experience. I can't begin to tell you how many houses I have sold by taking prospective buyers out on the deck in nice weather and painting them a word picture of rib eye steaks sizzling on the grill.
- Replacing 1,250 square feet of existing siding with new vinyl siding, including all trim, was estimated to cost around $10,948 in our area. This project was expected to return a disappointing $7,111 -- about 65 percent -- of the dollars it cost.
- The "attic bedroom" project was specified to convert unfinished attic space to a 15-by-15-foot bedroom and a 5-by-7-foot bathroom with shower. This would include a 15-foot shed dormer, four new windows and closet space under the eaves. The contractor would insulate and finish ceiling and walls, and carpet the floor. HVAC will be extended into the new space with electrical wiring and lighting to code.
Again, I was surprised by the poor return.
The survey estimated that this project would cost just over $50,000, which seems a speck high for this market. There are plenty of skilled home builders who are hungry for work right now and I think you could find a good contractor who would find a way to do this job for less. Maybe I am wrong.
In any case, survey respondents estimated that this project would return only 64 percent of the dollars invested -- just $32,276 -- upon resale.
Particularly disappointing in this survey was a ever-popular major kitchen remodeling project. It involved updating an outmoded 200-square-foot kitchen with a functional layout of 30 linear feet of semi-custom wood cabinets, including a 3-by-5-foot island; laminate countertops; and standard double-tub stainless-steel sink with standard single-lever faucet. Included was an energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposal and custom lighting.
This project was estimated by Atlanta remodelers to cost about $57,000, but added only about $33,400 on resale.
What they didn't tell you was that projects such as these may make all the difference when it comes time to sell your house. For a complete copy of the "Atlanta Cost Vs. Value" survey, please visit my website at Money99.com, and click on "resources."
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John Adams is an author, broadcaster and investor. He answers real estate questions on radio station WGKA (920am) every Saturday at noon.
For more real estate information or to make a comment, visit www.money99.com.
