By Jamie Smith Hopkins The Baltimore Sun
Pop quiz: What’s the home-improvement project that comes closest to paying for itself when you sell?
Not a snazzy new kitchen or bathroom. A lowly steel front door.
So says Remodeling magazine in its annual survey breaking down the cost benefits of spiffing up your home. Nationally, the survey says, replacing your door costs an average of $1,137 and has a resale value of $978.
“That’s the entrance of the home,” said Dave MacLean, director of sales at Brothers Services Co., a Hampstead, Md.-based remodeling firm. “That’s the absolute first impression.”
A steel door, if Remodeling magazine is right, will recoup 86 percent of its cost at sale. The survey suggests that beats the heck out of a major kitchen renovation (69 percent) or a bathroom remodel (65 percent).
The takeaway is to think on a smaller scale — at least if your priority is resale.
Costs for the survey’s five most valuable projects range from the $1,137 door to a minor kitchen improvement of about $18,500 (new cabinet fronts and hardware, plus replacement countertops and the like). For the bottom five, costs start at $11,400 for a backup power generator and top out at nearly $73,000 for a sunroom addition.
The survey relied on appraisers and real estate agents, about 3,900 nationally, for its resale estimates. But appraisers warn that home improvement is not an exact science. It depends on the property, the neighborhood and what buyers expect.
At a certain point, say, a property with a bathroom and kitchen predating the Eisenhower administration, you might need to do major updates just to get anyone in the door to look. And market expectations vary a lot by neighborhood.
In affluent areas, “you need to know your competition,” said Sharon Cremen, owner of Cremen Appraisal &Consulting Inc. in Forest Hill, Md. “If they all have these great gourmet kitchens, you need to have a gourmet kitchen if you’re putting your house on the market. Or you need to be extremely realistic about how much the property is going to sell for.”
Cremen, by the way, isn’t convinced that a steel front door gets you such a hefty return. It’s not that she doubts the importance of curb appeal, but she says this example of it so hard to measure. “Front door” isn’t even its own line item on her appraisal reports.
“There’s just no way to isolate the value of a front door,” she said.
Where she agrees with the survey findings is that simpler is generally more cost-effective. Replacing cabinet fronts and appliances, say, rather than gutting the kitchen. Or building a much-needed bathroom within the footprint of the house rather than adding on.
One niche project that urban residents say could end up paying for itself multiple times over wasn’t included in Remodeling’s Cost vs. Value survey.
Ron Howard, an agent with ReMax Preferred in Baltimore, says parking pads fall in that category for parking-scarce neighborhoods in and around Baltimore’s Inner Harbor. He said it costs $2,000 to $4,000 to build a pad, and he puts their value at somewhere between $20,000 to $30,000, based on the varying estimates he’s received from more than 20 appraisers over the years.
“Some people like courtyards,” he said. “Way more people want parking.”
He points to a Baltimore rowhouse he sold in 2011 as a prime example. The owners brought him in after they’d been on the market for six months with no offers, despite price drops. He suggested they put in a pad, and they did. Nineteen days later, they had a contract for $270,000, near their asking price.
Mike Martin, one of the then-owners, loved the suggestion because he got the project done for virtually nothing. The courtyard out back was already topped by concrete. All he had to do was pull down a cinderblock wall that surrounded it, something he managed over a weekend with help from family and friends, and patch up the concrete afterward.
It saved Martin and his wife from having to come to the settlement table with cash.
“We had bought in the peak of the market, and so it was one of those things: When we went to sell it a couple of years later, we didn’t have any real value gained,” Martin said. “So we were really price-conscious. We couldn’t just continue to lower the price to sell the house.”
If you’re improving your home to live in it, the value proposition gets a lot more complicated to reduce to hard numbers.
Really, really want a home office? Then you might not mind so much that Remodeling magazine’s survey says you’ll get only 44 percent of the cost back, on average. That’s dead last on the list of 22 typical, as opposed to upscale, home-improvement projects. And you’re probably not thinking about what you’ll get back when you sell if you’ve had so many power outages that you’re planning to shell out for that backup power generator.
Michael Evitts says he’s tried to keep both the potential resale value and the present-day living value in mind as he and wife Anne Faulkner upgrade their Baltimore rowhouse. It’s something that’s on their minds a lot.
“Our home is in a perpetual state of home improvement,” Evitts said.
Over the years, the couple has added insulation, new windows, a high-efficiency heating and air-conditioning system and, of course, parking out back. (Not concrete, though; they put in cement lattice pavers that let the rain through rather than contribute to runoff.)
Now they’re in the early stages of a new project: Completely redoing the first floor, which until last fall was rented out as an apartment. They’re working with an architect to make the finished product suit their needs and use less energy.
“We’re not looking to recoup the money we’ve invested, necessarily, but we’re looking to reduce our financial exposure as energy costs rise,” Evitts said. “And I don’t know how you measure it economically, but we’ll get the value of having a nicer space. But definitely, anyone who’s doing a rehab, even a minor one, would be foolish not to think about long-term value when it comes time to sell the house.”
Kenny Gordon of home-renovation firm KSG Contractors in Odenton, Md., thinks it makes sense to consider all the various ways to measure the value of a project. But if someone’s just looking to sell, his top recommendation is so simple you can DIY.
Repaint. Preferably in a neutral color.
“Paint,” he said, “is like magic.”
&Copy;2013 The Baltimore Sun
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