a Berkshire Hathaway affiliate
Advice
Posted in: Selling a home, Homeowner tips

The five home improvement projects with less return

Home improvements with bad ROI

Whether you’re prepping your home to sell or just trying to make some strategic upgrades, it’s important to consider the return on investment before beginning home improvements.

Here are the five midrange upgrades with the lowest ROI, as stated in the Remodeling 2017 Cost vs. Value Report (www.costvsvalue.com) for the Minneapolis area. Of course, every upgrade is different, so we’ll also offer advice on keeping costs down, and when you may want to proceed with the more expensive upgrades anyway.

1. Backup Power Generator


Cost: $14,026
Resale value: $5,089
Cost recouped: 36 percent

This upgrade installs a “modular electric backup system” that has allows for 70 amps of power. The generator project would also require a concrete area, transfer switch, grounding rod, cables, a fuel line and a storage battery.

If your home routinely loses power during Minnesota’s fierce winter storms or thunderstorms, then the cost of a backup generator may be worth it to you. But if you are usually unaffected by inclement weather, or plan to sell your home soon, it should be easy to nix this costly purchase and implementation.

2. Bathroom Addition


Cost: $51,433
Resale value: $23,459
Cost recouped: 46 percent

In this undertaking, a crawlspace is converted into a 100 square foot bathroom with poured concrete walls. The interior of the room includes a marble vanity/sink combo, tub/shower with ceramic tile, standard toilet, mirrored medicine cabinet and a linen closet. Last, the room is lit and wired for electric, fully painted and has a ceramic tile floor.

Overall, the best way to get return on a bathroom addition is to live in the home for a few years. If your family has outgrown your current bathroom options, you may find it’s worth the cost to add a bathroom now, and then recoup less than the full return once you sell down the road. If you plan to sell soon, you may see higher buyer interest as your home meets their criteria for more bathrooms – but you shouldn’t expect a buyer to pay for the full cost of the upgrade.

3. Backyard patio

Cost: $59,538
Resale value: $27,561
Cost recouped: 46 percent

The cost of this upgrade seems a little high to us, but the patio described in this project is also out of an outdoor entertaining dream! They start by installing a 20x20 flagstone patio behind the home, then connecting that patio with a sliding glass door. The patio’s main appeal comes from its gas-powered fire pit, complete with four chairs, as well as a stone kitchen unit with a gas grill, small refrigerator, outdoor sink and storage area. A cedar pergola is added from each corner so the entire patio can be shaded by an awning. Lighting, gas and electrical connection prices are also included.

If you’re just looking for a simple backyard patio with casual furniture and a grill, you can save tens of thousands of dollars to create your outdoor oasis. Our advice is to talk with a contractor to learn how you can keep the cost down, while still having some of the thrill of the luxury patio described in the above project. (We’re definitely daydreaming of that outdoor kitchen area now.)

4. Roofing replacement


Cost: $26,565
Resale value: $15,480
Cost recouped: 58 percent

In this project, you’ll remove and dispose of your existing roofing, then “install 30 squares of 235-pound fiberglass asphalt shingles… with new felt underlayment, galvanized drip edge, and mill-finish aluminum flashing.” The project also assumes a 5-square hip roof, two skylights and customized work along the vented ridges.

If your roof is smaller than the one mentioned here, or you don’t have skylights, then you may be able to save some money on the cost of a new roof. While it’s not a glamorous project and it doesn’t provide a high return on investment, an old or damaged roof is likely to turn off buyers when you try to sell your house down the road.

5. Master suite addition

Cost: $137,759
Resale value: $71,686
Cost recouped: 51 percent

One main effect we’re seeing from the HGTV phenomenon? Master suites, especially in certain price points, are a buyer expectation. However, that doesn’t mean a buyer will foot the bill for a full master suite addition!

In the average project cost from the Cost Vs. Value Report, a master suite addition took place by adding a 24x16 foot suite over a crawlspace. The bedroom room includes a walk-in closet and dressing area and carpeted flooring. The en-suite bathroom includes a free-standing soaker tub, a separate ceramic tile shower, his-and-hers sinks and ceramic tile floors. Both rooms are fully equipped with new walls, ceilings, trim, lighting and electrical.

It’s worth saying that many homes can be upgraded by converting existing rooms into a master suite, or by adding another bathroom so that the main shared bathroom becomes used only with the master suite. If that’s an option for you, then you could save tens of thousands of dollars by avoiding a true addition. The best bet is to hire a professional who can walk through your space and recommend options for revamping the space you already have.

The fine print

Many remodels, especially additions, will require a permit from the city where you live. Do not begin construction on a bathroom or bedroom addition without going through the proper channels. Residents of Minneapolis can call 311 to see if they need to get a permit. Residents of greater Minnesota or Wisconsin should call their city’s Department of Planning to see if a permit is necessary.

Remember that your home’s space and needs might not be a direct parallel to the projects represented here, and you may be able to find discounts on everything from windows to fixtures and lighting to keep costs lower. Work with a licensed contractor to get a quote in advance and to see if you can make the improvements on a lower budget.

Wondering what the best remodels are for resale value? Check out the Remodeling 2017 Cost Vs. Value Report by selecting the West North Central Region, then Minneapolis, from www.costvsvalue.com.

© 2017 Hanley Wood, LLC. Complete data from the Remodeling 2017 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.

Join over {{'43232' | number}} subscribers

Status Definitions

For sale: Properties which are available for showings and purchase

Active contingent: Properties which are available for showing but are under contract with another buyer

Pending: Properties which are under contract with a buyer and are no longer available for showings

Sold: Properties on which the sale has closed.

Coming soon: Properties which will be on the market soon and are not available for showings.

Contingent and Pending statuses may not be available for all listings