The Top 10: Which Projects Can Actually Make Money

Roundup.

This week, we looked at the Top 10 Projects on the Cost vs. Value Report for Richmond, VA.  I think there’s more to learn from the list than just a list of 10 items.

First, take a look at the 6 highest ranking items:

1. Entry Door Replacement
2. Garage Door Replacement
3. Basement Remodel
4. Deck Addition
5. Window Replacement (vinyl)
6. Siding Replacement

With the exception of #3, they are all exterior projects.

The Takeaway: Don’t ignore the value of curb appeal when you sell your home.

Click for a great article on curb appeal tips from This Old House

#3 is a basement remodel.  After the top 6 exterior lineup, we follow up with a finished attic for #7.

The Takeaway: Increased (finished) sq. footage is one of the best ways to add value to your home.

Coming in at #’s 8 and 10, the minor/major kitchen remodel is not the silver bullet we usually think it is when you sell your home.

The Takeaway: In the current market, a lot of buyers are looking for a deal; a fixer upper.  I’ve seen a lot of sellers who throw in some granite counters and stainless steel appliances and think that it’s going to make every buyer swoon.

It won’t.  It doesn’t.

Buyers know that they’re paying for that granite and those appliances, and most of the time, they’d rather spend their money designing their own kitchen rather than have you do it.  A blank slate and a fair price is more attractive to buyers than some half-assed uninspired kitchen renovation.  Renovate your kitchen because you want to renovate it- not for a buyer.

Click for an article on 28 Thrifty Ways to Customize Your Kitchen

Here’s the last thing.  With the exception of project #1- a new entry door- none of these projects ended up putting money back into your pocket.  Check it out:

Job Description                        Job Cost                      Value Added                    Cost Recouped

1. Entry Door                              $1098                               $1488                                 135.5%
2. Garage Door                           $1178                                $1079                                 91.6%
3. Basement Remodel             $57,627                          $45,757                             79.4%
4. Deck Addition                       $9,916                              $7,670                               77.3%
5. Windows (vinyl)                   $9,965                              $7,705                               77.3%
6. Siding (vinyl)                         $10,347                           $7,917                               76.5%
7. Finished Attic                        $45,591                           $33,921                             74.4%
8. Minor Kitchen Remodel    $20,762                        $15,358                               74%
9. Windows (wood)                   $10,873                         $8,011                                 73.7%
10. Major Kitchen Remodel    $55,004                          $38,713                              70.4%

The Takeaway: Unless your cost recouped is over 100%, you are losing money.  That’s right.  Only one project of the top 10 meets that criteria.  In the current market, if you want to make money by doing improvements before you sell, you’ll have to do them yourself.  Doing it yourself means dramatically slashing your job costs, which means increasing your cost recouped.

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

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