Payback: Remodeling Projects That Add Value to Your Home

The majority of home owners view their home as their most important investment. We're always considering ways to improve our homes to accommodate our lifestyles. Popular remodeling projects include new kitchens with up-to-date appliances, luxurious bathrooms, home offices or media rooms. In Central New York, with our frequent cloudy days, many people add a sunroom to ease the drudgery of winter. Basement renovations add living space and improve a home's function. But which projects add value to a home investment when it comes time to sell?

If you are thinking about remodeling your home, take a moment to ask yourself the following questions:

• How long do I plan to own this property? (If you're planning to live in the home for less than five years, it may make sense to take on remodeling projects that freshen up the inside of the home and promote curb appeal.)
• How does the value of my home compare to other properties in the area? (Generally, a remodeling project that is less than 20 percent of the average resale value in your area can be recouped when your home is sold.)
• What do I gain by remodeling? (Many people remodel to enrich their lifestyle and enjoy their home. If you love to cook and entertain, a state-of- the-art kitchen will provide years of pleasure. If you're a wine connoisseur, a wine cellar and bar are "must haves". If you have a beautiful yard and want to bring in the outdoors, then add a sunroom. If these are the things that add pleasure to your life, go for it!)

According to Remodeling Magazine's 2009-10 annual report on the relationship between remodeling costs and resale value, different remodeling projects offer a wide range of payback. The table below compares remodeling costs to resale values in the Mid-Atlantic States (including New York):

The costs recouped on a remodeling project depend on a variety of factors including the condition of the rest of the house, the value of similar homes nearby, and the rate at which property values are changing in the surrounding area. If resale value is a factor in your decision to remodel, consult with a local remodeler about construction costs and look closely at the comps and market conditions in your area.