If you have started to research how much a home remodel might cost you, then chances are you have heard of the Cost vs. Value report.
Most home renos are completed from a sheer need that the homeowner desires. However, many renovations are also a result of the homeowner trying to increase their home’s value.
This is where the Cost vs. Value report comes into play. Let’s break it down for you.
What is Cost vs. Value?
This is an industry-standard used amongst contracting professionals. It is a concept that balances the cost of something and the gain or profit it stands to earn.
Just because an item may cost a good deal, does not mean it is of high value.
For example, converting a garage to add living space requires a lot of expenditure for such a unique project. Because many potential homeowners would rather have the garage space, this is a low-value project if you are considering resale.
The Cost vs. Value Report
The Cost vs. Value report is a set of remodeling estimates that are released annually. These numbers have been an industry classic since 2002.
You can find this report posted every December for the preceding year on Remodeling Magazine’s website.
These numbers are calculated by pulling data across various U.S. markets. The way this data is compiled is by taking surveys from members of the National Association of Realtors®, publishers of remodeling cost estimating tools, RemodelMAX, and then, coordinated by The Farnsworth Group.
Things to keep in mind
Before you embark on your research, it is best to be aware of a couple of things.
No matter the type of remodeling project you take on, it will depreciate in value. It is very rare for a remodel project to give you a 100-percent return on your investment.
This is due to the general wear of the items used in your remodel, changes in trends and technology, and the value of surrounding homes and neighborhoods possibly decreasing.
Home additions are currently the lowest value type of home remodel. This is because they cost so much in terms of structural changes that it does not outweigh the price per square footage.
However, they are the best kind of renovations for homeowners who want to make a starter home their forever home.
Using the Cost vs. Value Report
The first item of interest to note is that this report has data that goes back almost two decades.
With this information, you are able to see the rise and fall of item prices and their values.
Analyzing these trends can help you to make a more informed decision as a homeowner.
Also, keep in mind that the report considers pricing for contracted labor. It does not factor in if you are DIYing the project yourself.
When you access the website, you then select your region, closest city, and download the generated PDF.
Now that you have a good idea of the statistics behind your remodel project, make sure you have a good contractor on your side. Contact us today for a free estimate!