Every year, Remodeling Magazine surveys realtors across the United States for their Cost vs. Value Report. This report takes an analytical approach to figuring out which renovation projects offer the best return on investment to homeowners. Here’s a quick summary of how a siding renovation stacks up against some other common renovation products:
The concept of Return on Investment (ROI) is pretty easy to understand in the context of the stock market: if you pay $100 for a stock and sell for $105 the next day, your investment returned 105%. ROI for renovation projects works the same way, but it’s tougher to figure out how much resale value a renovation project with add to your home. That’s where Remodeling Magazine’s Cost vs. Value report comes in handy.
Here’s how the report works: First, they create detailed estimates and design renderings of 22 common renovation projects. Next, they survey professional realtors from across the United States to ask how much additional resale value each project created. The data isn’t perfect, but it does give us a good overall idea of which projects give you the best bang for your buck.
We’ll go into a little bit more detail down below, but here are 5 of the more interesting projects from the report, and where they rank for ROI:
The Projects
#1: Manufactured Stone Veneer (300 sqft)
Details: The project includes removal of old siding and installation of new adhered manufactured stone veneer as an accent.
Average cost: $9,357
Average return: $8,943
Average ROI: 95.6%
#4: Fiber Cement Siding Replacement (1,250 sqft)
Details: The project includes removal of existing siding and installation of new, factory painted fiber cement siding and all appropriate trim boards.
Average cost: $17,008
Average return: $13,195
Average ROI: 77.6%
#5: Vinyl Siding Replacement (1,250 sqft):
Details: The project includes removal of existing siding and installation of new vinyl siding and accessory trims.
Average cost: $14,359
Average return: $10,731
Average ROI: 74.7%
#14: Roof replacement – Metal (3,000 sqft)
Details: The project includes removal of existing roof material, and installation of pre-finished standing seam metal roof with pre-formed accessories. Also includes synthetic underlayment with ice barrier around the perimeter.
Average cost: $40,318
Average return: $24,682
Average ROI: 61.2%
#20: Major Kitchen Remodel – Upscale (200 sqft)
Details: The project is to fully update an outmoded kitchen. This includes stone countertops, new 3’x5’ island, fully custom cabinetry, imported ceramic backsplash, top of market built in appliances, high-end sink with built in filtration system, new lighting, and new tile flooring.
Average cost: $135,547
Average return: $72,993
Average ROI: 53.9%
A few notes about the data (feel free to skip this paragraph if you aren’t a stats nerd):
Since Remodeling Magazine is an American publication, the construction costs and market values are in U.S. dollars. Keep in mind that conversion when looking at average project costs.
The report is geared around “generic” projects. No crazy custom colours to throw off the data.
We have chosen to show you national figures, as we believe they give the most accurate snapshot.
The report relies heavily on the educated opinions of professional realtors to provide the “value” side of the equation, so keep that in mind.
Remodeling Magazine asks that when re-producing their data, we limit ourselves to no more than 5 projects in the same article. There are other interesting projects to examine as well. If you would like to access the full report, visit www.costvsvalue.com (Link will open in a new window).
Analysis
For 2020, a manufactured stone veneer accent is the #1 renovation you can complete by return on investment. This would mean that, in theory, if you were planning to sell your home, adding stone veneer to the front would be an easy choice to improve curb appeal, help you sell faster, and bring back almost what you paid.
Unfortunately, it probably isn’t quite that simple. Properly installing a stone veneer without removing all the siding on a wall is probably only possible with vinyl or fiber cement siding. If you have old stucco, wood, or metal siding, the cost of the project would likely increase.
In 4th and 5th place respectively, we have new fiber cement and vinyl siding. Looking back at the data from past years, siding renovations always hit somewhere in the same mid 70% ballpark for ROI. It makes sense that a relatively inexpensive project that completely updates the entire exterior of the home would bring solid value to the homeowner. If your siding is in rougher shape than average, the ROI of a siding renovation could be even higher.
On the lower end of the spectrum, a standing seam metal roof wouldn’t be among the best projects in terms of ROI. Homeowners in some cities could see much more value in a standing seam roof, depending on the climate. If you live in a city that sees massive hailstorms every few years, like Red Deer, Airdrie, or Okotoks, a virtually indestructible roof starts to seem like a better investment. In cities like Edmonton where our hailstorms are both less common and less severe, homeowners may prefer to stick with a high-quality asphalt shingle.
Coming in at #20 is the upscale version of a major kitchen remodel. We can safely assume that this remodel includes the best possible appliances, and custom finishes throughout. It might come as a surprise, then, that this project barely returns half of the retail cost in market value. Maybe it’s because house hunters don’t fully appreciate the intricate detail of the project as much as the original owners did. Perhaps most homebuyers wouldn’t spend that kind of money on a kitchen remodel, so they discount its value. Either way, it’s clear that a major, high-end kitchen remodel isn’t the best way to increase the value of your home - though I’d sure appreciate this kitchen for myself!
From this data, it’s clear that realtors believe in curb appeal as a great way to increase your home’s value on the market. It’s easy to see why: homebuyers get a better first impression when walking up to timeless James Hardie siding than if they were looking at faded old vinyl or dented aluminum siding. As any realtor will tell you, a good first impression goes a long way for house hunters.
All data is courtesy of the Remodeling 2020 Cost vs. Value Report, which can be viewed in full at www.costvsvalue.com.