Major home improvements can add value, but don’t expect to break even

Home renovations and remodelling can give sellers an extra boost, but most won’t recoup their investment.

Bathroom renovations are a particularly bad investment. The Boston Globe

January 21, 2016

2 minutes to read

Rising home prices mean better financial returns for homeowners who shell out money for major renovation and remodeling projects, a new survey shows.

“Upscale projects’’ involving more extensive work led the way in 2015, Remodeling magazine reports in its annual, nationwide “Cost vs. Value’’ report.

The total amount recouped on average from two-story additions jumped 8.1 percent last year, followed by master suites (6.1 percent) and major kitchen remodels, up 4.2 percent. All told, homeowners can expect to recoup more than 60 percent of their cost on these projects.

Of course, the dirty little secret of renovation and remodeling projects is that few, on their own, pay for themselves – let alone make homeowners money.

Rather, homeowners are lucky if they can recoup most what they paid out on various projects.

Still, if that new garage door or shiny master bath helps convince someone to buy your home, then it is truly priceless.

“When times get better, the price bands get bigger,’’ Jonathan Dienhart, director of research at Metrostudy, told Remodeling magazine. “It’s no longer ‘It’s a 2,500-square-foot house so it should cost this,’ but rather, ‘It’s a 2,500-square-foot house that has this and this.’’’

The “Cost vs. Value’’ report also breaks down the numbers by region, with New Englanders, not surprisingly, able to do quite well installing insulation.

In fact, fiberglass attic insulation is one of the few actual money makers when it comes to home improvement projects, costing just under $1,300 to install but sporting a 143 percent return.

New England homeowners can also expect to recoup 94 percent of their costs when replacing their garage door or putting in a steel door at the front entrance.

A manufactured stone veneer is also high up on the list, with homeowners likely to recoup 86 percent of the costs of the project.

Homeowners may want to think twice, though, before embarking on some projects.

Generally, adding to the size of your bathroom doesn’t pay off, with homeowners lucky to get back half of what they paid.

Among the worst projects, in turns of dollars recouped, are mid-range bathroom additions, upscale bathroom additions and adding on a deck made of composite materials, according to the “Cost vs. Value’’ survey.