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December 21st, 2011

No. 8: ‘3 hot home renovations’

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iStock_Blue PrintsNumber eight on our Top 10 most popular articles of 2011 is the article, “3 hot home renovations.”

Publish date: June 07, 2011
Written by: Gina Pogol

Excerpt:

Popular renovations range from basic to upscale. Below are three of the most-desired renovations, according to the Homeowner Sentiment Report, as well as the percentage of homeowners who want them. Also listed is the projected return on investment (ROI), according to Remodeling magazine’s 2010-2011 Cost vs. Value report.

1. Adding a bathroom

How many homeowners want this: 57 percent

What it could cost: Bathroom additions cost, on average, $40,710 for mid-range 6-by-8 bathrooms, or as much as $78,409 for upscale 10-by-10 projects. Features that take the tab skyward include multijet or steam showers, expensive stone and woodwork, custom tiling, flat-screen TVs, sound systems and even fireplaces.

ROI: The return on investment on extra bathrooms averages only 53 percent, so you will want to carefully consider how badly you want and need the extra room. The payoff depends partially on how many bathrooms you already have–going from one to two bathrooms in a three-bedroom house will return more than increasing from three to four bathrooms.

Remodeling an existing bathroom costs less and pays more. On average, a basic job costs just $16,634 and returns 64 percent, while an upscale redo runs $53,739 on average and returns 57 percent.

2. Overhauling your kitchen

How many homeowners want this: 49 percent

What it could cost: A mid-range project may involve replacing cabinet fronts, drawers and hardware, as well as installing a new wall oven, cooktop, counter tops, sink and faucet, wall covering and flooring. The national average of such a kitchen facelift is $21,695.

A major overhaul could mean gutting the interior and putting in the best of everything. A partial list includes top-of-the-line custom cherry cabinets with built-in sliding shelves, stone counters with an imported ceramic or glass backsplash, a built-in refrigerator, a cooktop and 36-inch commercial-grade range and vent hood, a warming drawer, a trash compactor, a built-in microwave and convection oven, snazzy new lighting and cork flooring. The average price tag of this high living is $113,464.

ROI: The mid-range project described above could return 72.8 percent, and the major overhaul could return 59.7 percent.

However, in certain neighborhoods, a dated kitchen can kill your home’s chances for a quick sale. The National Association of Realtors says that, in cases where upgraded kitchens are considered standard by homebuyers, a kitchen renovation could return more than 100 percent.

3. Add a bedroom (or two)

How many homeowners want this: 46 percent

What it could cost: If you have an attic you can convert to an extra bedroom, you are in luck. The renovation costs $51,428 on average.

However, a mid-range master suite addition will run you about $108,100, while an upscale job could cost you up to $232,100. High-end amenities might include a spacious sleeping area with a lounging/sitting area, a large master bathroom, custom bookcases, built-in storage, a high-end gas fireplace with stone hearth and custom mantle, and a large walk-in closet/dressing area with natural light, mirrors and linen storage.

ROI: Will it pay? That depends on your region, city and neighborhood. In general, these projects pay off best in the south-central and southwestern parts of the country and in more expensive parts of town. For example, in Dallas, a $93,000 master suite addition adds more than $66,000 in home equity, about a 71 percent return. But it brings less in the east-north-central cities. In Cleveland, for instance, a $114,200 master suite addition recoups about $62,500, a 54.7 percent return.

Read more from our ‘top 10 of 2011’ list:

No. 10: Why is it so hard to be approved for a HARP refinance?

No. 9: Crazy to refi into an ARM? Not at all

For more on home renovations, read:

Can’t move? Improve! Get the most bang for your buck with these renovations

Save green on energy-efficient home improvements, even without a tax credit

4 easy home improvements save energy and money

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One Response to “No. 8: ‘3 hot home renovations’”

  1. Roofing Company Toronto Says: February 21st, 2012 at 11:49 am

    I’ve seen some great graphics that detail all the different parts of the home and how much a renovation would cost in comparison to the ROI on it. Bathroom, Basement, and Kitchen were always the biggest investments while not having a great ROI.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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