a year ago
More and more homeowners begin to realize that remodeling their homes can not only improve their living standards but is also a long-term investment. I believe many people have confusion when they consider renovating their homes: should I have a more stylish kitchen, or should I have more attractive exterior walls? If I decide to renovate the kitchen, should it be a major or minor project?

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1. The Renovation Project Gives You the Highest Cost Recouped

Recently, the well-known American magazine Remodeling released 2020 Cost vs Value Report that provides massive information on remodeling cost and cost recouped in different states in the U.S., and it is highly valuable as a reference. Link:

The phrase “cost recouped” is used in the report, which means the percentage of the additional resale value over the investment cost. For example, if investing $30,000 in remodeling kitchen can bring an additional $36,000 resale value on the house, then the cost recouped is 120% ($36,000/$30,000).

This year’s report analyzed 22 types of renovation projects in 101 real estate market in the U.S. Take the West Coast as an example, the top five projects with the highest cost recouped are:

  • 1. Manufactured stone veneer, the job costs $10,175, with a resale value of $12,157, and the cost recouped is 119.5%
  • 2. Garage door replacement, the job costs $3,874, with a resale value of $4,537, and the cost recouped is 117.1%;
  • 3. Entry door replacement (steel), the job costs $2,048, with a resale value of $1,801, and the cost recouped is 87.9%;
  • 4. Minor kitchen remodel (midrange), the job costs $26,150, with a resale value of $22,657, and the cost recouped is 86.6%;
  • 5. Siding replacement (fiber-cement), the job costs $20,064, with a resale value of $15,647, and the cost recouped is 78.0%.

If your goal is to sell the house as soon as possible, then you should think like a real estate agent when it comes to remodeling. Pay attention to the exterior of the house first, because the buyer’s first impression is important. If the house is well-maintained from the outside and looks homie, then people may be more willing to step inside to get to know more about the interior. For such reason, only one out of the top five projects is interior remodeling.

However, it is also an interesting one. Since last year, President Trump has imposed high tariffs on imported remodeling materials such as wood and steel, and the remodeling cost increased significantly compared with before. Even so, a minor kitchen remodeling job (typically referring to the replacement of new laminate countertops, new energy-efficient appliances, etc.) can still rank number 4 amongst all 22 jobs, with a cost recouped of 86.6%, which is excellent news to the ones intend to improve the kitchen environment.

Besides, since SB 969 went into effect last year, the trend of replacing garage doors remain strong. For safety reasons, some buyers will be concerned about whether a garage door contains a backup battery.

Note: A massive power outrage triggered the by California fire has left many garage doors unable to be opened, and the homeowners are trapped in the house. Under such conditions, the new law requires that all newly installed electric garage doors and switches must contain a backup battery, effective on July 01, 2019.

2. Two Factors Affecting Resale Value in Remodeling

Choose a project based on statistics is important, but more important is the resale value after remodeling. Two factors should be valued in this process, which is first, the coordination with neighbors, second, the original design of the house.


First, your house should stay consistent with the other houses in the neighborhood. For example, if your neighbors are all middle class, and you remodel your house into an extravagant one, then the investment might not offer you a return you expected, because who can afford such houses would consider an even better neighborhood.

The original design

Second, when you do a partial remodeling, adopt materials and colors that are either the same or contrast with the rest of the house to keep a consistent style inside and out. If you plan to resale the house in the short term, it may not be a good idea to adopt a bold and strange color palette. The buyers tend to choose classic and conservative tones to add a touch of their style on top of it, instead of doing a large-scale redesign.

3. How to Undertake Remodeling Decisions According to Your Need

It is difficult to impose a unified standard because a major renovation in the kitchen, bathroom, and bedrooms is full of individualization, thus the cost recouped is relatively low. But it is easy to find out that the cost recouped of all projects is over 52%, meaning that a “poor” investment does not exist in a renovation. There are two factors deciding cost recouped, quantitative and qualitative. Quantitative results are measured by the resale value of the project, but the qualitative results obtained through the pleasure of living in such an environment. Their importance varies depending on the length you are going to live in the same house, below are three scenarios:

Less than five years

If you plan to sell the house in five years, the smart way is to spend on the projects that increase the resale value of the house to the maximum extend. In this case, the quantitative factor surpasses the qualitative. Before determining the scale and budget of the projects, it is vital to know what projects bring the highest resale value, such as the top projects in the report with high cost recouped, including remodeling the exterior wall, replacement of the garage door, minor kitchen and bathroom remodeling.

Five to ten years

In this period, you may want to maximize the combination of quantitative and qualitative factors to provide a solid base for your decision. Ten years can make you fully enjoy the result of the renovation and get financial profits out of them, such as replacement of metal doors and windows, roofing replacement, deck addition, etc.

Over ten years

If you plan to live in the current house for over ten years, then you should take account of the need of the family and your financial affordability, such as build an additional bedroom or bathroom and make major high-end remodeling to bedrooms, kitchen, and bathrooms.

The overall economy in the U.S., the real estate market in California and other factors can all affect cost recouped of a renovation. If your house is not for urgent sale, then the best way is to take account of your taste and preference, consider the potential resale value of various projects, and find the balance between life and the investment.