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Increasing Your Home's Value
Thinking about updating your kitchen or bath to get the most profit from your home's sale? Find out which remodels reap the best rewards.
BY
Cyndia Zwahlen
PHOTOGRAPHY
Photo by EMILY MINTON-REDFIELD

Many a homeowner yearns for a new kitchen, an upscale bathroom remodel or an efficient home office in place of an unused bedroom. However, they worry about whether the money invested in a remodel will pay off. Will it increase the resale value of the home? Often these concerns result in perpetually postponed projects and abandoned remodeling dreams.

While most experts urge homeowners to consider their personal needs when making home improvement decisions, the good news for those with an eye on the bottom line is that remodeling can pay off, literally. And most projects are returning more of their cost today than just a few years ago, according to a recent survey. This is due, in part, to the recent housing boom and increased buyer expectations, both of which have served to drive up standards.

The highest paybacks for remodeling projects nationwide include a mid-range, major kitchen remodel, which costs on average $43,900 and returns 91 percent of that investment at resale (up from 66 percent in 2002, according to the 2005 Cost vs. Value Report published jointly by Remodeling and Realtor magazines). A mid-range bathroom remodel costs on average $10,500 nationwide and returns 102.2 percent, compared with 87.5 percent three years ago.

The Denver area is also experiencing an increase in the return on investment in remodeled kitchens and baths, according to the study. In this market, the addition of family room space via a basement remodel or family room addition is also popular with buyers, typically returning more than 80 percent of the cost.

“These are the rooms that sell a home,” says Judy Johnson of Coldwell Banker in Denver. “The rest of the house virtually comes along for free.”

Homeowners nationwide spent more than $139 billion last year on home improvements, according to a Harvard study. They have a lot at stake when it comes to remodeling decisions, so CH&L asked the experts for their advice on the most cost-effective projects.