Read This Before Remodeling – AARP News

According to the 2016 Cost vs. Value national survey by design and construction information company Hanley Wood, most remodeling projects return a portion of the cost in the home's resale value, though the amount varies greatly by project and a bit by region.

For instance, the survey indicated that the best overall return on investment came from adding fiberglass insulation to the attic. At a national average cost of $1,268, it returned nearly 117 percent of the investment. (The payback is even greater when you include savings on heating and cooling costs while you own the home.)

Among the lowest on the list of midrange projects was adding a backup power generator, costing an average of $12,712 and returning just over 59 percent of the investment. The addition of a swimming pool wasn't included in this national survey, as they are typically more common in warmer climates.

Let's take kitchen remodeling as an example, and use a fictitious couple. Charles really wants the new kitchen, but Joyce says it's a waste of money. Further, let's say Charles has a quote for what he wants that comes in at $59,999, or the national average. According to the survey, Charles and Joyce are likely to recoup about 65 percent of the cost, or $38,938.

Craig Webb, editor in chief of Hanley Wood's Remodeling magazine, told me a good starting place for the net cost would be the difference between the total cost and the estimated increase to the resale value of the house. In this case, that would be about $21,061. Wood added that if you're staying in the house longer, it's even more important to weigh a project's cost against the benefits to you. Some changes, such as a walk-in shower, may be vital if there comes a time when you're no longer able to get into the bathtub.

I would tell Charles and Joyce that it isn't an investment in the same sense as a stock or mutual fund they would expect to appreciate. After all, it's pretty hard to enjoy a stock or mutual fund every night when you come home from a hard day at work, like you might a new kitchen. So I would tell them they need to base their decision on whether they think this new kitchen would bring $21,000 worth of happiness over the years they plan to keep the house.

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Read This Before Remodeling - AARP News