Home Remodeling: Investment Cost vs Return Value

cost vs value home remodel

A Soft Real Estate Market and Tight Credit Affect Home Improvement

When allocating the home improvement money as tax refund season looms and another economic stimulus package is discussed, it’s important to stay current.

Factors Affecting Home Equity on Remodels

• Emerging energy-efficient technology

• Sustainable, green building products

• Economic environment

• Seasonal/availability prices of construction materials (for example, a few years ago the price of concrete spiked while China was experiencing a construction surge.)

• Time of the year (remodeling contractor fees can vary; outdoor projects in the winter vs indoor projects during the summer, etc.)

• The cost of electricity, natural gas, and heating oil

The Current Remodeling Cost vs Recoup Value Statistics

Remodeling magazine keeps up with home improvement cost/return statistics. The national average presented is generated from US regional data. What does this mean if the home is outside the US? It means nothing is nailed down, but due to today’s global economy, general economic trends may be able to be extrapolated.

Their 2014-2015 national averages report reveals that the ROI on almost all projects is down from 2013. It may be speculated that this may be due to the slumping and uncertain real estate market, leading to uncertainty. Only three remodeling projects are trending up:

Bathroom remodel. The old stand-by maintains its importance. Why? Perhaps because it remains the most personal room in the home and the fixtures can be very cost-intensive per square foot. The average cost of the bath remodel is $51,455; the resale value is $36,400; and the recoup value is 70.7%. Yes, resale is lower than investment, but recall that this is today’s cost recoup data relative to 2013.

Deck addition using Trex or other composite deck materials. This may reflect the tendency to spend more family leisure and entertaining time at home (the hip, new term for this is “staycations”) rather than taking vacations and traveling during tough economic times with uncertain fuel costs. The average cost comes in at $37,498; the resale value is $23,706; and the recoup is a healthy 63.2%. Once again, this percentage is up from the percentage in 2013.

Siding replacement using foam backed vinyl. The fact that foam backed vinyl siding (which means added insulation) went up while cement fiber siding (such as Hardi products) went down may indicate that the trend is that energy savings are trumping durability. The vinyl statistics are: average cost is $12,528; resale is $10,074; and recoup is 80.4%.

What’s in the Future for Remodeling Trends?

home improvement

Currently, more focus is on exterior rather than interior projects. With more homeowners electing to sit tight, this may be a hedge against both high and uncertain energy costs.

With the home resale market in a slump, homeowners may be more focused on lowering utility bills and not moving rather than banking on ROI.

Design Your Own Home

DIY Home Architectural Design Course

This approach to home design is meant to assist the faint-of-heart amateur in overcoming the challenge of creative design.

E is for Educate

1. Would you bake a cake without a list of ingredients? Mostly this step is about creating a scrapbook, describing the lifestyle to be lived in the home. I recommend a few Sunday drives around historic neighborhoods.

2. Would you assemble a bicycle without instructions? If your house is to have “good bones,” you’ll need to make at least one construction site visit.

3. Set a realistic construction budget (no need to do a line item take-off), take take a trip to the lumber yard.

4. Learn to “translate” the language of realtors, contractors and mother-in-laws (the advice you will surely receive from all the sidewalk superintendents in your life.)

C is for Conversation

Conversation is about speaking and rehearsing and then writing down the thousand words that is the picture of your dream home. If we don’t yet have the picture we must write the description.

We have all walked through houses that only exist in author’s imaginations, sea captain’s homes, medieval castles, antebellum plantation homes. It is because they have been described to us in vivid and exacting detail.


The work of design is A.R.T. (approximate and adjust-revise and recognize-transcribe and trace). These tasks start where your elementary school art teacher left off.

home architectural design

A is for Approximate

When you start drawing, it should in a sense be from memory, not trying to recreate exactly something you have seen you like, but recreate the feeling and emotion of your “scrapbook” collection. Try to push yourself to get as many ideas on paper as you can. Don’t try and solve the whole problem at once, just play with it for now.

Get ready to access your inner child, get ready to scribble outside the lines. Put your wastebasket at three point distance, wad up your first dozen attempts (at least), launch them (remember your follow through). Your tools will be fat magic markers and stubby crayons, “bum wad” (rolls of thin trace paper available at most art stores).

Trial and error is our method of choice. Sure it would be safer to build what everyone else is building, (while you’re at it, draw in the Green Mini-Van in front). Listen, why is it after looking at twenty thousand pre-drawn house plans on the internet you haven’t found one you like? It’s because they lack one essential element in the design process; the Client. Most architects would agree that their designs only improve after meetings with a client. Clients push designers to put more of their character, personality and lifestyle into the final design.

R is for Recognize

It has been said architectural design is only about recognizing the solution, another talent every reader has in his or her possession. Maybe you want a house that reminds you of the feeling of the house you vacationed in at the “Cape” when you were a child or the “painted lady” on Main Street. The cliché, “I’ll know it when I see it” is an appropriate sentiment.

R is for Revise (Sidewalk Superintendents, Mother-In-Laws and Me)

We’ve all encountered the friendly retiree watching diligently over a construction project’s progress, we’ve all been on the receiving end of one or another relative’s opinion on how they would improve our home. And alas, even strangers may only be too happy to offer their two cents worth of advice for your building project. It comes with the territory. Criticism is an absolute necessity to improving your design, you must learn to filter these well-intentioned comments, consider them and test them, and be confident enough to revise your design (or not).

T is for Transcribe

Architectural design shouldn’t be thought of as a foreign language in need of interpretation, but rather an unspoken language you already are fluent. Like many second generation immigrants, we can hear and understand the language, but haven’t yet learned how to put it to paper. And yes, all this can be accomplished with a fourth grader’s skill set; after all this method is called “tracing.”

Using a Wood Stove as a Primary Heat Source

Heating Your Home With Firewood is a Viable Option


The cost savings related to home-heating double as a personal benefit of using wood heat as well. Because wood heat is less expensive, budget-conscious home-owners feel better about keeping their homes at warmer temperatures.

Darren Gordon’s story illustrates this point. “[Before installing a wood stove,] I turned down the thermostat in the winter and turned it up in the summer. We kept the house pretty cold all winter. But now we keep the house toasty warm twenty four hours a day.”

Jim Ballenthin’s story is similar. When the Ballenthins were considering moving from a warmer area to a colder area of Minnesota, Jim Ballenthin’s wife, Jean, wanted to make sure that their home would be comfortable in the cold winters.

“Wood heat was the perfect way for Jean to be as warm as she wanted without me complaining about the cost of heating fuel,” says Jim Ballenthin.

And it does get cold in Minnesota! The Ballenthins have kept their house warm using wood in temperatures as low as -50F!

“Nothing beats a wood stove for the warming effect of radiant heat,” adds Jim Ballenthin. “It’s very cozy, comfortable, and frequently romantic.”

installing a wood stove


Before burning wood, Darren Gordon used to exercise at the gym. Now he uses wood splitting as a primary way to stay in shape. “If you are going to work out,” Gordon says, “you might as well do something that puts money in your pocket at the same time. Splitting wood really is an enjoyable activity. It has actually become one of the major reasons that I want to keep heating with wood.”

Similarly, the Ballenthins see the physical benefits, as well. Jim and Jean Ballenthin enjoy splitting wood together. “The exercise of cutting firewood is better than that obtained at any health club,” says Jim Ballenthin. “It connects us to—and makes us more aware of—our need to live in a sustainable relationship with our environment.”

Personal Satisfaction

“It’s a lifestyle choice,” says Darren Gordon. “Either you love [heating with wood] or you don’t.” It’s safe to say that Darren Gordon loves heating with wood. In fact, he has even written a detailed account of his family’s experience with wood heat.

Jim Ballenthin agrees. “Burning wood may be a hassle for those for whom money is of no concern or for those who are not connected with the woods, forests, and outdoors. But it is second nature to us,” he says. “It’s a matter of choices, priorities, economics, and exercise of personal values. At this time, it’s hard to imagine us heating any other way.”

Ballenthin continues, “Friends and guests crowd around the stove after being outside on a cold winter day cross-country skiing, snow shoeing, ice skating on the lake, or just walking. A hot toddy, cup of hot cocoa, or coffee with Kahlua and a warm stove just can’t be beat for social conviviality.”