Remodeling:less bang for your buck?

The average price of remodeling a home has been steady increasing, from $38,286 in 2003 to $50,908 today, but value added to the home at the time of sale has increased by only a little from $31,591 in 2003 to $32,497 today, according to this CNNMoney article.

So today, you're making up for 63.8% of the costs, which is down 4% even from just last year.

But the other way you might want to look at it is in terms of whether or not the house will sell as all without the remodel. You may be taking a hit, but it's probably less of a hit than you would take by keeping your house on the market for too long.

National Association of the Remodeling Industry President Ron Cowgill agrees with me on that. He says the best remodels you can do now are those that are simple and meet your needs rather than those of someone who might buy the house.

"You can always upgrade the counters or the faucets later," he says. "Don't buy the nickel-plated faucets for three times the price of the chrome ones.  You can fix it up later if you're planning on staying in the house."

Ron says redoing areas of your house that are particularly nasty might be key to selling, but because buyers are looking for value right now, it doesn't make sense to put in the best appliances or finishes.

I find this interesting in terms of the rent vs. buy breakdown. You will never have to finance any remodeling on a rental property, and you won't gain or lose any value out of what you do or don't do to the property, other than maybe a security deposit. When those overzealous "buy, buy, buy" types take a look at the real cost of some of owning, this should be a consideration. Not that I think monetary value is the only gain you get out of remodeling. Clearly, living in a recently remodeled home is probably nicer or more to your taste than living in an old home.

And not all remodels are created equal. As the article points out, basic needs like new, better insulated windows are more valuable in Northern climates in the winter. Additional space adds more value than just making something nicer.

The National Association of the Remodeling industry points out that most homeowners are now doing their remodeling in a series rather than all in one shot. Maybe the could help with some of the loss of value, because  you could choose which pieces of your home need work the most or which remodels are just a luxury.