Top 10 projectsHere are Remodeling's top 10 projects. You'll notice that these are not ambitious, vanity jobs. All are projects that replace worn or aged home components, bring parts of the home up-to-date or add living space without expanding the home's foot
- Replacing exterior siding with upscale fiber cement. Siding pays back a whopping 78%, on average, of the $13,461 average cost. The most cost-effective thing you can do to your home this year is to replace old siding with new, higher-end fiber cement.
- Replacing an entry door with a midlevel 20-gauge steel door is an inexpensive upgrade at $1,238 on average, but it pays back 73% and greatly improves curb appeal.
- A midrange attic bedroom remodel involves popping out a dormer for a 5-by-7-foot bathroom with shower, insulating and finishing the walls and ceiling, adding four windows, extending the heating and air conditioning and improving wiring and lighting. The payback is 72.5% on the $50,148 expenditure. More living space is being sought as adult children are driven back to their parents' homes by the shaky economy and as older parents join the households of their adult children. (The Census Bureau says 18% of American households are doubled up now, up from 17% in 2008.) An attic remodel is the cheapest way to add space and a bathroom within the house. A basement remodel is the next most cost-efficient way to add living space, although code requirements for headroom and exterior doors make that project more complicated and more expensive, Alfano says.
- A midrange minor kitchen remodel paid back 72.1% of the $19,588 investment. Included are new laminate countertops and new sink, faucets and appliances. The floor is untouched and cabinets are kept in place but refaced with new hardware added. "You're taking what's there and giving it a face lift," Alfano says. "The kitchen really looks good and the average cost for this is under $20,000 – less than what a lot of people would pay for a car." In today's austere climate, kitchen and bath remodels are pale imitations of the lavish vanity projects from the housing boom. Most consumers are shunning the expensive spa baths and chef's kitchens that involve moving electrical services, plumbing and walls.
- A midrange garage door replacement may not be high on many wish lists; it's one of those jobs that you do because it's needed. But it adds curb appeal and function, and it pays back 71.9%, on average, of the $1,512 average cost.
- A high-end garage door replacement recoups almost as much: 71.1% of the $2,994 average cost.
- A new wood deck earns back 70.1%, on average, of its $10,350 cost at resale this year.
- New foam-backed vinyl siding replacement keeps the house warm and pays back 69.6% of its $14,274 average cost. The average project involves 1,250 square feet of siding, including trim.
- New midrange replacement vinyl siding upgrades the look of the home and pays back 69.5% of the $11,729 average price.
- Upscale vinyl replacement windows have a 69.1% payback on the $14,328 cost. The project involves replacing 10 double-hung 3-by-5 windows. The new windows are low-emissivity glass and are insulated with simulated wood-grain trim.
Remodeling costs are plummeting, but so is the return on every dollar spent. Remodeling Magazine says these 10 projects have the highest return on investment, and they all focus on maintenance, replacements and enhancing curb appeal
The cost of remodeling is dropping, to the delight of homeowners who can afford to make improvements to their homes.
Remodeling costs have dropped 10% to 15% in the past five years even while the cost of materials rose about 17%, according to Remodeling Magazine, which recently released the 2011-2012 edition of its annual Cost vs. Value Report.
That sounds like great news for consumers but, with homes selling for less and less, the amount you recoup from a project when you sell the home is falling, too. Here’s what the overall remodeling spending versus payback trends look like, followed by the 10 best projects to invest in.
In the past six years, the return on a remodeling investment has steadily eroded, Alfano says. Payback peaked in 2005, when home sellers earned back more than 86.7% of money they spent on remodeling projects, on average, the survey finds. That return has been eroding steadily ever since, hitting a low of 57.7% this year.
Despite the generally low payback, there are a few star performers.
Replacement projects are really strong because they're cheap and they make the house look good immediately. If you get new windows, new siding and replace the front door, the house looks great. It sells faster and for more money.
And, from the Remodeling Magazine report: "The use of durable, low-maintenance materials in replacement products appeals to homebuyers who increasingly are looking to reduce both the operational cost and maintenance cost in their homes."
One key to the popularity of replacement projects today: Not only do they cost less – except for a new roof – but homeowners are inclined to see them as necessary home maintenance rather than as a discretionary splurge.