When It’s Time to Remodel, Some Home Renovations Pay For Themselves. These Upgrades Might Not.

Some families put in a fancy pool to entertain their kids, others overhaul a kitchen or bathroom to add value to their home. What they might not know: the return for these (and other) renovations may not pay off when it’s time to sell a home.


When It’s Time to Remodel, Some Home Renovations Pay For Themselves. These Upgrades Might Not.

Some families put in a fancy pool to entertain their kids, others overhaul a kitchen or bathroom to add value to their home. What they might not know: the return for these (and other) renovations may not pay off when it’s time to sell a home.


When It’s Time to Remodel, Some Home Renovations Pay For Themselves. These Upgrades Might Not.

Some families put in a fancy pool to entertain their kids, others overhaul a kitchen or bathroom to add value to their home. What they might not know: the return for these (and other) renovations may not pay off when it’s time to sell a home.


One sweaty Maryland summer day, Rachel Mallalieu, M. D., was once again dragging her three kids and their gear to the community pool. Heavily pregnant, she snapped in the heat and declared, “We have to get our own pool.”

Of course, it’s never easy. Her family’s home had a small backyard that needed grading, a fence and — at her husband’s insistence — natural landscaping. “It ended up being about $50,000, but I was pregnant and hot and working full-time, and I wanted that pool.”

“I’m sure we won’t see the money back if we sell,” Dr. Mallalieu says.

That’s because, when it comes time to sell a home, it’s often the unsexy, practical updates — a new garage door or siding replacement — that add value to a home, according to Remodeling Magazine’s 2019 Cost Vs. Value assessment. The lowest returns, according to the survey, typically come with renovations undertaken for homeowner comfort and style — upgrades that make a house feel like a custom, personalized home.

Pools, for example, aren’t known for providing much of a return on investment, or ROI — as little as 7 percent, according to estimates from real estate agents and home improvement experts. So a $50,000 pool might add just $3,500 to a home’s sale price. The numbers fluctuate by region and even neighborhood; in colder climates, a pool might actually decrease a home’s sale price, while in balmy Florida or Hawaii, a pool could be an asset.

But resale value is the last thing on Dr. Mallalieu’s mind. “It was worth every penny. It’s been a lifesaver just to get the kids out of the house.” Years later, the kids still use it every day, and it’s a fun-filled neighborhood gathering place, she says.

Renovations With Low Return
on Investment (ROI)

Climate can impact a
renovation’s R O I. Example?
A pool may be an asset in
balmy Florida or Hawaii,
but in colder parts of the
country, it can actually
decrease a home’s sale price.

Project Average Cost ROI(%) / Resale Value
Project

Upscale Master Suite Addition

Average Cost

$271,470

ROI(%) / Resale Value

50.4% : $136,820

Project

Midrange Backyard Patio

Average Cost

$56,906

ROI(%) / Resale Value

55.2% : $31,340

Project

Upscale Bathroom Addition

Average Cost

$87,704

ROI(%) / Resale Value

58.1% : $51,000

Project

Midrange Master Suite Addition

Average Cost

$130,986

ROI(%) / Resale Value

59.4% : $77,785

Project

Upscale Major Kitchen Remodel

Average Cost

$131,510

ROI(%) / Resale Value

59.7% : $78,524

Geography affects the value a renovation adds to a home. Market trends do too — remember the bathtub whirlpool craze? How do homeowners who want to renovate balance their preferences against the marketplace?

“If you buy a house with the idea of reselling it, you should be incredibly aware of what’s hot and what matters,” says Craig Webb, an industry expert who has followed building and remodeling trends for more than 10 years, including six as Remodeling Magazine editor-in-chief. Homeowners should pay attention to trends because they could have an impact — good or bad — on the home’s sale price. But for homeowners planning to live in a house at least five years, resale value isn’t the only consideration, he says.

A major deck upgrade nets a new level of outdoor living

Emily Dawe and her husband, homeowners in sunny and mild Santa Monica, California, were planning a major renovation and decided to add in a total rebuild of the deck. The cost of the entire project, including the deck: approximately $600,000.

They are widening their deck’s wooden stairway and changing the deck from one level to two — keeping a barbecue area off the kitchen and dropping the dining level down several steps. New walls will buffer against evening’s cool ocean breezes.

Nationally, the R O I on backyard patio renovations hovers around 55 percent, but it rises in the temperate Pacific region and goes up again in sunny Los Angeles, according to the Remodeling analysis.

Backyard Pation Renovation* Average Cost ROI(%)/Resale Value
Backyard Pation Renovation*

U.S.

Average Cost

$56,906

ROI(%)/Resale Value

55.2% : $31,409

Backyard Pation Renovation*

Middle Atlantic

Average Cost

$58,027

ROI(%)/Resale Value

46.7% : $27,124

Backyard Pation Renovation*

East North Central

Average Cost

$58,144

ROI(%)/Resale Value

52.7% : $30,652

Backyard Pation Renovation*

East South Central

Average Cost

$53,538

ROI(%)/Resale Value

53.6% : $28,680

Backyard Pation Renovation*

South Atlantic

Average Cost

$54,161

ROI(%)/Resale Value

54.4% : $29,445

Backyard Pation Renovation*

West South Central

Average Cost

$53,455

ROI(%)/Resale Value

54.2% : $28,980

Backyard Pation Renovation*

Mountain

Average Cost

$54,774

ROI(%)/Resale Value

55.4% : $30,319

Backyard Pation Renovation*

New England

Average Cost

$59,447

ROI(%)/Resale Value

56.5% : $33,575

Backyard Pation Renovation*

West North Central

Average Cost

$55,403

ROI(%)/Resale Value

58.0% : $32,111

Backyard Pation Renovation*

Pacific

Average Cost

$63,109

ROI(%)/Resale Value

63.5% : $40,045

Please see transcript below


As the family waits out the renovation with their two young boys squished into a tiny rental apartment, what Dawe says they miss most is having dinner on the deck. The renovations are all about making their deck — and home — meet their needs as a family, with little or no thought to the return. This is their forever home, unless something unexpected happens. “I don’t want to move,” says Dawe.

Renovating, as opposed to trading up to a new home, is a trend Webb thinks is on the upswing. “People are living in their homes longer and planning to stay in their homes,” he says.

Numbers from a national database that tracks property characteristics support that. Homeowners who sold in the first quarter of 2019 had owned for an average of 8.05 years, up from 7.75 years from the same period in 2018. From 2000 to 2007, the length of ownership hovered around four years.

They spent $10,000 to renovate a renovation

Of course, just because a homeowner plans to stay in a home doesn’t mean it always works out that way, as Georgia photographer and arts advocate Neda Abghari discovered.

Abghari and her husband renovated their Athens, Georgia, home from top to bottom. The house had been a college rental for 20 years. They fixed the plaster walls, replaced drywall, remodeled the bathrooms, refinished the hardwood floors and put in new carpet upstairs.

When it came to the kitchen, they went all out to make it their own. Instead of wall-mounted cabinets, they brought in an antique hutch. They installed an old industrial stainless-steel sink instead of a standard sink.

But then a job change forced the couple to move to Atlanta after just three years — and out went their personal choices.

"We spent $10,000 renovating the kitchen again because we didn’t think a regular buyer would want that. We had to normalize it."

— Neda Abghari, Photographer and Arts Advocate

“We spent $10,000 renovating the kitchen again because we didn’t think a regular buyer would want that. We had to normalize it.” In came quartz countertops and standard cabinetry. The house came under contract within 30 days of the re-update.

The seller loved the kitchen re-do. The buyer? Not so much

Kitchens are popular targets for renovation. But even in Brooklyn’s hot housing market, real estate broker Brian Blessinger has seen renovations that didn’t come close to paying for themselves, including midrange apartments outfitted with “completely bananas” kitchens with refrigerated wine coolers, waterfall countertops and the highest of high-end appliances.

“The person who is looking for a two-bedroom apartment doesn’t want every bell and whistle,” says Blessinger. “Ultimately, if the buyer is a middle-class person looking for something functional, that over-the-top stuff isn’t going to work.”

“It’s just really hard to nail a stranger’s taste and maximize the return,” he adds. “Maybe you like Miele and they want Wolf, or they want a French country kitchen and you like industrial.”

As with pools, location matters when it comes to the resale value of kitchen updates. R O I runs at 59.7 percent nationally, but in New York City, for instance, it’s just 51 percent.

Upscale Kitchen Remodel* Average cost ROI(%) / Resale Value
Upscale Kitchen Remodel*

U.S.

Average cost

$131,510

ROI(%) / Resale Value

59.7% : $78,524

Upscale Kitchen Remodel*

Middle Atlantic

Average cost

133,740

ROI(%) / Resale Value

53.5% : $71,578

Upscale Kitchen Remodel*

East North Central

Average cost

$133,702

ROI(%) / Resale Value

55.8% : $74,599

Upscale Kitchen Remodel*

West South Central

Average cost

$124,346

ROI(%) / Resale Value

57.3% : $71,284

Upscale Kitchen Remodel*

East South Central

Average cost

$125,338

ROI(%) / Resale Value

57.7% : $72,293

Upscale Kitchen Remodel*

New England

Average cost

$136,941

ROI(%) / Resale Value

57.9% : $79,292

Upscale Kitchen Remodel*

Mountain

Average cost

$127,648

ROI(%) / Resale Value

59.7% : $76,212

Upscale Kitchen Remodel*

West North Central

Average cost

$128,674

ROI(%) / Resale Value

59.8% : $77,008

Upscale Kitchen Remodel*

Pacific

Average cost

$143,333

ROI(%) / Resale Value

62.4% : $89,429

Upscale Kitchen Remodel*

South Atlantic

Average cost

$126,307

ROI(%) / Resale Value

65.5% : $82,677

Please see transcript below


Blessinger remembers one buyer, an architect, who lowballed her offer on what he considered a nicely renovated brownstone. The architect wasn’t impressed. Her attitude toward the sellers was, “I know you think you have taste, but you don’t, and I’m going to go in and do what I want,” he says. She knocked $300,000 off the bid to cover the changes she would make — and the sellers accepted.

Their whirlpool tub was trendy, until it wasn’t

Often, the most well-meaning R O I advice means nothing to an owner. Take Webb, the industry expert whose job revolves around tracking renovation costs and value closely. He and his wife renovated a row house on Capitol Hill in Washington, D.C., about 20 years ago. Their contractor advised a more Victorian renovation to match its history, but Webb ignored the advice and went ahead with a modern look.

“The contractor kept saying to us, ‘Well, you know you’ll never get a good return on the house when you’re doing this,’ and all we’d keep saying was, ‘Well, this is our house,’” he says. “We would not have been happy if we had based our renovations entirely on resale value.”

The one room where they did follow trends was in the bathroom: They put a hot tub with jets in the master bath. “We probably regret it to this day, but in 1999 everybody had a tub with jets. Now if we try to sell, people will say, ‘Oh my god, look at that.’” But Webb says they’re staying put — and haven’t thought about whether they’d replace the tub if they had to sell.

Splurging on the details was an investment in comfort

The upscale bathroom re-do is a temptation that’s hard to resist. Dawe of Santa Monica says she’s been trying to reel in her architect’s high-end tastes a bit. Still, they went for a $1,000 bathroom faucet, and they sprang for high-end custom cabinets for the two bathrooms they’re renovating, as well as for the kitchen.

Why? Largely because of their commitment to living in the home for years to come. “Our plan is to raise our kids here and be here for a while,” she says. “We don’t want to do a crappy job. It feels like it’s worth it to spend a little more to have it be nice.”

Upscale Bathroom Remodel* Average Cost ROI(%) / Resale Value
Upscale Bathroom Remodel*

U.S.

Average Cost

$64,743

ROI(%) / Resale Value

60.2% : $38,952

Upscale Bathroom Remodel*

Middle Atlantic

Average Cost

$66,488

ROI(%) / Resale Value

53.3% : $35,445

Upscale Bathroom Remodel*

Mountain

Average Cost

$62,013

ROI(%) / Resale Value

53.8% : $33,356

Upscale Bathroom Remodel*

East North Central

Average Cost

$66,499

ROI(%) / Resale Value

57.5% : $38,251

Upscale Bathroom Remodel*

South Atlantic

Average Cost

$61,063

ROI(%) / Resale Value

60.8% : $37,130

Upscale Bathroom Remodel*

New England

Average Cost

$68,243

ROI(%) / Resale Value

60.9% : $41,577

Upscale Bathroom Remodel*

East South Central

Average Cost

$60,164

ROI(%) / Resale Value

61.0% : $36,692

Upscale Bathroom Remodel*

West North Central

Average Cost

62,564

ROI(%) / Resale Value

61.1% : $38,246

Upscale Bathroom Remodel*

West South Central

Average Cost

$60,167

ROI(%) / Resale Value

62.6% : $37,659

Upscale Bathroom Remodel*

Pacific

Average Cost

$72,734

ROI(%) / Resale Value

66.7% : $48,548

Renovating a
Forever Home?

Find out how it can impact coverage.

Please see transcript below


Dawe’s thinking when it comes to renovations resonates with many homeowners, including Dr. Mallalieu. Her kids have grown since the pool was installed (her oldest is now 14), but she views their pool and landscaping as a worthwhile investment since her kids still use it “pretty much every day that it isn’t raining.” Her backyard is a magnet for neighborhood hangouts and family get-togethers.

“Everyone always comes to our house for the pool, she says. “And even if my siblings are trying to get something together — there’s 10 grandkids between the three of us — it ends up always being at my house.” And, Dr. Mallalieu admits, the pool isn’t just about everyone else: “I like it too.”

* Source: Remodeling Magazine 2019 Cost vs. Value assessment

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Written by

Erin Behan

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