Remodeling your house can accomplish two great things – you enjoy the home you want, and it’s worth a lot more.
Home improvement websites and HGTV programs, seemingly centered more on entertainment than fact, often focus on the recovery value of various types of home improvement projects. These home remodeling advice forums typically focus on the dollar value of home improvements rather than the less easily quantified personal and emotional value inherent in a home improvement. Their value relates more to house “flipping” than a properly designed and carefully crafted home remodel. Keep in mind that a home, particularly one located in Metro Washington DC, is an appreciating asset, and wisely investing in your home adds value within a few short years.
Return on Investment (ROI)
Though homeowners are often concerned about Return On Investment (ROI) in relation to their home remodeling projects, the data is hard to pin down and at best provides ranges for ROI. The websites www.Renofi.com and www.mpamag.com gather their data on a nationwide basis and report that the ROI on the typical home renovation ranges from 70% – 75%, with smaller projects having a quicker and higher return. Surprisingly, mpamag.com reports that a screened-in porch addition stands out at 93% ROI, but remember that ROI varies depending on the state, city, quality of house, and type of remodeling project.
Renofi.com identifies long-term value projects as home additions, finishing the basement, or adding a bedroom or bathroom. The website identifies short-term value projects as kitchen remodels, bathroom remodels, or deck and patio projects. In my experience, a proper kitchen remodel is not a short-term investment. The kitchens we remodel typically last 30 years or more. Ultimately, the homeowner will have to decide what sort of remodeling project will give the best value in terms of quality of life, comfort, and aesthetics, as well as ROI.
I tell homeowners in Metro Washington DC that if they are going to do a high-dollar home remodeling project ($250,000 or more), they should plan to stay in their house five to ten more years to let their house appreciate in value. And, with the length of time it takes to plan, design, permit, and construct a quality remodel, it’s important to live in the house and enjoy it. Harder to quantify, but easy to see, is the added dollar value of a professionally designed remodel. When the house looks great, the spaces work as intended, and the aesthetic decisions are in sync with the home, the added value is significantly more than the 70% that Renofi.com reports.
The recovery cost of home improvements needs to be evaluated on a case-by-case basis because of the many variables influencing value. Many websites discuss a range of recovery cost for home improvements from a low of 30% to a high of 100%. Moving the value of your home improvement to the higher end of recovery is influenced by the intangible value of a good design and construction. Essentially, you cannot determine value, but you can influence it through the best design and quality workmanship available.
Remodeling Is A Form Of Conservation
One could also argue that a well-designed home is a form of environmental conservation. A thoughtfully designed building that is functionally and aesthetically pleasing has a greater chance of avoiding demolition. Therefore, the building materials used in its construction will serve for a longer period of time and not be sent to the landfill. In addition, future generations will find the well-designed house more appealing and will happily adapt it to their needs.
Professionally Designed Home Remodels
Professional design services have proven to be an essential ingredient for protecting and enhancing the value of real estate. Who wants to buy or rent a poorly designed or unattractive house or pay top dollar for it? In a sophisticated and highly educated market like Washington, DC, there are few home buyers who will settle for a badly designed house, especially with current high prices.
The evidence of poor design is everywhere in our city. It is illustrated through inefficient floor plans that do not use available space wisely, interiors that have no flow, and façades that will never make your heart joyful. With the same amount of financial investment and thoughtful design, these renovations could have added more value to the property. Homeowners willing to use the services of a design professional have the best chance of success in protecting the value of their home improvements.
Frequently, real estate agents will advise a home buyer to “not over improve.” As an architect, I have found that to be poor advice. Thoughtfully planned and well-designed home improvements always pay off. A beautiful home remodel adds significantly more value than a poorly designed one. I recently heard from clients who had to move from their NW DC home. We had previously remodeled this home and, years earlier, their Capitol Hill home. These clients expressed their thanks for the wonderful home remodeling work that added so much economic value to their homes. Both of their houses sold fast and made money.
When The Work Is Done
When the work is done, homeowners often find they have a property worth significantly more than was originally anticipated. Recovery cost is not an exact science, and the value is influenced by many variable market conditions, but good design gives you a head start in creating a higher value. If you are planning your next home improvement or remodel, remember that great design can enhance your wallet as well as your sprit. Experience the joy!
Bruce Wentworth, AIA is an architect and founder of Wentworth. Visit www.wentworthstudio.com to learn more about the firm’s residential design/build services.