2022 Cost vs Value: To Renovate or Not to Renovate?
By Lisa Fant
Owning a home comes with required maintenance and owner-wanted upgrades, but when it comes time to sell, there are certain renovations that could bring you in the highest return on your investment. If you’re wondering if the investment will pay off, Remodeling Magazine’s annual Cost vs Value Report compiles the most profitable home renovation projects homeowners may want to consider.
The 2022 Cost vs Value Report compares the average costs for 22 remodeling projects with the value those projects retain at resale in 150 U.S. markets. According to the report, exterior improvement projects are providing the greatest return on homeowner investment projects. The Cost vs Value report aims to indicate what value particular remodeling projects add to a home’s sale price.
Key Trends in the Cost vs Value Report
- – Of the 22 remodeling projects in the report, 11 are exterior replacement projects, and all these rank within the top 12 projects with the highest return on investment, or ROI.
- – Material costs have been increasing for the last decade and increasing sharply for the past two years. While values have also been steadily inching up for the past five years, the costs bring down the overall number, which is the return on investment.
- – Of the nine regions, three—Pacific, New England, and Middle Atlantic—outperformed the national average of 61.7% (for all 22 projects).
- – There is more than one kind of value. Lifestyle enhancement, increased accessibility, or the ability to accommodate a growing family are all reasons homeowners take on remodeling projects, each with its own type of value.
- – Despite the sharp cost increases for building materials in 2021, the decline in overall ROI in the 2022 report was 1.2%, displaying steady remodeling markets amid economic concerns and supply-chain challenges.
When it comes to the decision to take on a renovation project, the cost and value comparison may not be the only thing you want to consider.
Which Projects are Worth the Money?
According to the report, garage door replacement, manufactured stone veneer, and a minor kitchen remodel are the projects most worthwhile for homeowners to see a return on their investment.
- Garage Door Replacement
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- Cost: $4,139
- Resale Value: $3,833
- Cost Recouped: 92.6%
- Manufactured Stone Veneer
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- Cost: $11,595
- Resale Value: $10,556
- Cost Recouped: 91%
- Minor Kitchen Remodel (Midrange)
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- Cost: $29,701
- Resale Value: $22,184
- Cost Recouped: 74.7%
Limit Personalization
While new stone veneer and an upgraded garage door can add extra curb appeal buyers may find valuable, you may want to consider keeping personal touches in your kitchen remodel to a minimum. Consider simple upgrades such as fresh neutral paint, updated appliances, or newly installed flooring. Many buyers prefer a blank canvas opposed to working around the previous owners’ design style. According to Apartment Therapy, eight out of 10 buyers prefer customizing their kitchen. It’s suggested that sellers present the kitchen as a space for potential, as a total customization may become an additional project for buyers and wasted money for you.
