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Getting the Most From Remodeling

April 02, 1989

With home remodeling booming in the Southland, where it totaled $1.5 billion in building permit valuations alone in 1988, and nationally, where permit valuations reached $12.6 billion, more and more homeowners are facing decisions about which improvements to undertake on their homes.

What are the best ways to spend home renovation dollars? Which improvements add the most value to a home?

Remodeling magazine selected some of the most popular improvement projects and asked contractors around the country to estimate the cost.

The estimates were based on the cost for a hypothetical 17-year-old, 1,600-square-foot, three-bedroom ranch house in a Midwestern suburb. Most projects would be somewhat more costly in Southern California, experts here say.

The contractors were asked to estimate the average amount being spent in such a remodeling. Based on the remodeler's figure, each project was given a resale value by a real estate expert.

The cost versus value of a renovation project can depend on whether a homeowner plans to live in the house for a while or will be reselling soon. Cost-value relationships also vary from region to region.

KITCHENS: If you can get by with a minor renovation, that is a better investment than an all-out major remodel--especially if you plan to live in a house only a few years, the remodeling experts said.

The contractors surveyed figured an average cost of $19,500 for a complete overhaul, including new cabinets, appliances and counters. The resale value of this improvement, said the realty experts, is $17,500--or 90% of the cost.

Cosmetic make-overs bring a higher short-term return. The average $7,300 spent on such cosmetic improvements as refinishing cabinets, replacing hardware and adding new counters and flooring has a resale value of $6,700--or 92% of the cost.

These costs are in line for the Southland, according to James A. Dieckmeyer, an Upland remodeling contractor who is president of the Remodeling Council of the Building Industry Assn. of Southern California.

But he cautioned that because the housing stock is newer here compared to the East and Midwest, a return of 60% to 65% is more likely on most Southland kitchen jobs.

Experts' tips: If you do plan a complete renovation, choose top-of-the-line, high-tech appliances.

Frameless European-style cabinets continue to lead in popularity, with white and almond laminate finishes and woods in light tones the most wanted.

Depending on the region of the Southland market, frameless cabinets can be more or less popular than traditional face-frame cabinets, Dieckmeyer said. He estimates the overall Southland breakdown as about 60% traditional, 40% frameless.

BATHROOMS: Adding a full bath is one of the best investments you can make, especially if your home has only one full bath. The average cost of a new 5-by-7-foot bathroom was estimated at $8,200. To a potential home buyer, that bath is worth $10,000.

According to Dieckmeyer, a new bathroom of this size would run about $10,000 in the Southland, and its recovery value would be about 75%.

Other tips: Luxury amenities are a big trend in baths of all sizes. Skylights and whirlpool baths are increasingly popular.

FIREPLACES: Adding a fireplace is another good investment. Figures were based on a factory-built, energy-efficient fireplace, at an average cost of $3,300. The Southland cost would be about $3,800-$3,900, in conjunction with a room, with trim about $500 more in most cases, Dieckmeyer said.

But homeowners would get the investment back and then some, since the estimated resale value comes in at $4,600--or 138% of the cost.

Experts' tips: Learn as much about factory-built, energy-efficient built-ins as you can before you buy.

GREENHOUSE ADDITIONS: In the Midwest, this was rated another good investment of home-improvement dollars--whether the homeowner plans on remaining in the home or reselling soon. The average cost of a greenhouse project was figured at $14,850--and all of that would be recovered at resale.

Family rooms and kitchens are the most popular spots for greenhouse installations, but they are also being used to expand usable living space in dining areas and bedrooms. And today, one out of three greenhouse structures is being used as a spa enclosure.

These are popular projects in some parts of the country, but not particularly in the Southland, Dieckmeyer said, due in part to the difficulty of meeting California's stringent energy code, commonly known among contractors as Title 24. The code requires exhaustive energy calculations and limits the amount of window area permitted in new construction or remodeling.

He estimates the Southland cost as in excess of $16,000, with a problematic return.

Experts' tips: Deal with a greenhouse specialist and inspect several finished projects before you decide. For maximum solar benefits, install a door between greenhouse and main living area to minimize overnight heat loss.

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