Which home renovation projects pay off?

Money spent now on an addition or bathroom remodel is sure to be recouped when you sell your home, right? Unfortunately, no. The truth is that very few homeowners completely recover the costs of their remodeling projects. For 2015, the average cost-to-resale-value ratio for remodeling projects is 62.2%, according to theCost vs. Value Report from Remodeling magazine.

The most financially rewarding projects tend to be smaller, such as replacing windows, entry and garage doors, and kitchen appliances, countertops and cabinet fronts. Exterior projects that typically stretch your renovation dollar include installing new roofs, fiber-cement siding and manufactured stone veneer.

If you have your heart set on building a master bed and bath addition or splashing out on a luxury kitchen, do it. But you should know that such projects are unlikely to increase the value of your home commensurately. Of course, remodeling cost-to-value rates vary according to region (they’re higher in Western and some Southern states), the quality of the work and neighborhood standards. •

Other articles in the August 2015 Edition of Business Matters: