One of the most common questions I am asked is, “How much will my project cost?”
Budgeting for a project early on provides the information needed to decide not so much how, but rather “if” a project moves forward at all. Establishing a realistic budget is necessary, though it can be a daunting task for most homeowners. There is help.
Every year, Hanley Wood, publisher of Remodel Magazine, scours the nation to obtain current information from big metropolitan areas about remodeling project costs. This information includes average costs for 22 different remodel projects and averages costs in nine regions across the country. No small task.
The report provides three pieces of information about each of the 22 categories:
- Average project cost
- The likely immediate value added to your home by doing this project
- Return on investment.
You can use this information to assist in your deliberations.
Value is, of course, a relative term. It’s the “why” that needs to be considered before taking on a remodeling project. If you are doing the project because you want to, the report will serve as a guideline regarding what your project might cost. But remember, these numbers are averages. Your remodel will probably be different than the average.
The Cost vs. Value data provides valuable information on several decision-making levels.
As a consumer looking to remodel, you can use this to establish a ballpark budget for your project(s). This report has been referred to as the “Kelley Blue Book of remodeling.” The problem with that analogy is that automobiles are far more standardized than remodeling projects. Each remodel project has features that are unique to itself.
The ROI information included in this report is a valuable. Should you sell your home, and you and your real estate agent feel it needs updating, you can refer to the data to give you some notion as to what you might expect as an ROI for the project you are considering. Often, real estate agents and sellers ask us to give advice on the efficacy of a remodeling project with their eye toward selling. The question always leads to the variable of time. How soon are you looking to sell? As a rule, the report gives us a time frame of one year. That is to say if you were to add a bathroom or remodel your kitchen, the average value returned (ROI), can be fairly determined. However, if you were to remodel and remain in your home for another two years or more, the report loses its accuracy. This is primarily due to the fluctuations in local real estate markets.
Often the information in this report will cause homeowners not to proceed with a project solely based on ROI. For example, minor kitchen remodels based on national data, will cost approximately $30,000 as of 2022. The return on investment is likely to be about 70%. That means you will lose about $9,000 in value should you sell within that same year. You and your real estate agent need to talk about how that information might affect the value of your home.
So, look at the report and read about the process used to gather and interpret the data. If you are considering remodeling your home and want some notion as to cost, this tool will help.
For more do-it-yourself tips, go to rosieonthehouse.com.
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