Remodeling your home is kind of like buying a new car. Over time, it will be worth a lot less than you paid for it.
That sun room addition? Expect to recoup only about 40 percent of your investment — if you’re lucky. In fact, real estate agents say many home buyers don’t even like these costly additions. What about the time you remodeled and created a home office with all those built-in book shelves? For all your trouble, you would end up getting only about a third of that investment when it came time to sell.
Even among remodeling projects with the highest return on investment, you can expect to recoup only about 83 percent of what you spend on vinyl replacement siding in Salt Lake City, 74 percent on a minor kitchen remodel and about 70 percent on new windows, according to the annual Cost vs. Value report 2010-2011 by Remodeling magazine.
Perplexed? Real estate agents and others in the housing industry aren’t.
“A lot of homeowners are really surprised at how little they can get back on the money they spent on remodeling projects,” said Kim Boekholder with Results Real Estate in Sandy. “It can create some hurt feelings when they want to sell and we have to break the news to them that although what they did is beautiful, buyers aren’t willing to pay extra for it.”
One of the biggest mistakes homeowners make, Boekholder said, is making changes that don’t have broad appeal. You may like bright yellow walls, but some buyers don’t.
One of Boekholder’s recent listings was a home with purple carpet. Even though it was in great condition, “every single buyer commented on it,” she said. “It was a huge negative and cost some offers.” Another Realtor had to break the news to sellers who had remodeled their home with an outdoorsy flair that potential buyers were being turned off by wallpaper, bathroom tiles and kitchen back-splash tiles adorned with hunting scenes.
Another myth is that all remodeling projects are created equally — or that the biggest, most expensive projects have the biggest return on investment.
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