Have you read the Methodology section? This is a thought experiment. No homes were actually renovated or appraised for this thing.

The authors use software to estimate the cost of a major renovation, then send an illustration of the virtual reno to a bunch of appraisers who (armed with reno costs) then estimate the resale value of the home with the proposed reno.

I don't think you have anything to worry about. This data is essentially meaningless. Unless you're planning a virtual renovation followed by a virtual sale you're probably fine.

thank you EAM44 - I totally missed the methodology section but was looking everywhere for it!

Seems pretty obtuse for something that gets shared so readily...

Here is a link that might be useful: Cost Vs. Value 2014 - Methodology

Meaningless sales & marketing ploy.

Oh, good. I thought the number sounded insanely high for Philadelphia.

Yikes!

I expect my upcoming major kitchen remodel to only cost about 20% of a midrange remodel per their info. And that is adding 30% on for unknown extra costs as a buffer and we're experienced enough at this (own four rentals, lots of DIY work) that really doubt we'll need most of that buffer. Ten years ago we did a gut remodel (no new appliances) in our old home, now a rental, for about $5k. It still looks awesome. We just did a gut remodel of another rental's kitchen, new gently used appliances, all new flooring cabinets, walls, plumbing, electrical, for about $4k. Sure, the cheap HD cabinets from the back wall but we did a beautiful job on the stain so no Blum hardware but everything works nice and looks good.

So, I'm a fellow cheapie, I guess. :)

I disagree with you in that I do think it's inflated data to convince us that we can't be happy with a major kitchen remodel that only costs $10k or less to further get us to spend more in a keep up with the Joneses mentality. I do question how they come up with those figures. Yes, I did read the methodology. But it seems that everything is figured with hired labor and I have never known anyone who doesn't do at least some of the work themselves. Not saying that some people don't lift a finger but I don't think that's the norm. Or am I way off base?

Of course, with my Handyman DH....I have a theme song for him to the Candyman tune...does mean that we rarely pay for any kind of labor. Having friends in the trades who will gladly stop by for advising and some assisting in return for a few salmon steaks from our freezer surely helps, too. So I have no idea how much labor costs add to projects.

Hmmmm, I think I just realized DH's real value and should probably start feeding him better. He deserves it!

These sorts of studies are very damaging to the average homeowner. These costs become self reinforcing in that a lot of people will unwittingly pay far more money than they should because these numbers will be presented as fact by those proposing to do the work.

My reality is that I will remodel a 1600 sf two-story house near Seattle from top to bottom for $50-60k doing the work myself. This includes a complete gut, everything except foundation, framing, and subfloors, but it will take five to seven years to accomplish. I've now finished the roof, siding, windows, outside doors, half the wiring, half the stairwell, and two upstairs bedrooms for $22,500, all permitted and inspected work. Double that for hired labor, and I'm still way under the study estimates.

What you have to realize is that the estimating software used for the study is a standard within the industry. It's what many of your contractors would use, and just plug in the list of specifications. It's also adjusted for the COLA of each area in question.

People on this forum are more DIY savvy, and less likely to pay 100% of the labor costs of a true gut remodel. For those that do, or who don't obsessively shop, it is going to be very close to what a licensed and insured General Contractor would charge for a project. I work with contractors daily, and have discussed the report with them. A few feel it's low in it's estimates, while others think it's high. The majority feel that it's an accurate estimate of most of the projects listed, for a complete project.

I will jump in, as one who "bandied".

First, yes, absolutely, no question, if you can DIY, especially if you can really DIY everything, it's a whole different ballgame! Forget the rest of us suckers.

I have seen attempts to estimate return on DIY, too, but obviously they would be entirely different.

Regardless, I too wonder about any of the methodology on any of this, DIY or no. It seems like a lot of false precision to me! I do not believe that anyone has a reliable, repeatable, scientific way to estimate this stuff. Like, for example, HomeGain, which claims that spending $75 for "staging" will garner me $3,999 more in selling price!

If you can prove that, I will easily raise $10 million capital for you to go out and do it, right now. I will front you the $75, and you can keep $1000, the homeowner can keep $2000, and I will take $999, ok? Let's go! Hire an army of stagers. I will do that trade, with an ROI of what was it, like 4,597%, all day long! Move over, Warren Buffet!

Frankly, it's virtually impossible to ascribe value to some of these things and to prove what each element contributed to selling price, because you have no "control home". About the closest you get is two identical apartments where one has granite and one doesn't. But did they sell on the same day with the same terms? Did one have fresh flowers and music playing (that was part of the "staging" that HomeGain assigns as much as $3,999 to!). Did one have a cuter agent? And most of the time you don't have houses that are that similar.

I dredged up what sorry "statistics" there are just to try to show that, even the industry itself does not purport to say that you will get back what you put in when you renovate. That, I think is hard to refute.

If you DIY, then you very well may be able to. If you hire a GC, odds are not.

That is my only point.

I am wrapping up a massive DIY remodel and I'm sure the ROI would be great if we were to sell. BUT in exchange for the financial cost, it took nearly 18 months of my life. The family is happy though, so there is that unmeasurable factor, and we get to enjoy the kind of architecture we like.

The only time I ever knew about actual ROI was when we put the house on the market three days after finishing. Dunno if software would have really been able to calculate that either but it was basically a bit more than 2x the $ put into it in return (also DIY).

>I have seen attempts to estimate return on DIY, too, but obviously they would be entirely different.

First, there is the time spent learning enough to actually pull off a DIY job. How do you value that?

Having worked on both sides of the equation, contractor and DIY, there is no question in my mind that DIY is at a minimum 50% less efficient than hiring it out professionally.

Our siding and windows alone took 400 hours over an entire summer. I will never recover that time financially. The only real value to us is that it was done correctly and that we did not go into debt. It certainly could not be measured in marital bliss ;)

One thing I have learned in all my years, however, is that knowing how to do basic finish work is where the real money savings is located. If you learn those skills, you will always be money ahead.

There's the old adage that you can get only two of the three- low cost, high quality, and speed/punctuality, unless you are very lucky with a starting contractor who does not know his/her worth.

In my limited experience that has been true. DIY is cheaper and possibly better quality if you are picky but takes longer. Hiring a cheap contractor usually results in quality or time headaches. If you want good workmanship in a timely manner without DIY you need to pay for it and that is usually what the cost estimators are looking at.

I am not sure that all of my savings decisions were worth it but I am glad that I hired a moderately priced contractor who is willing to put up with my notes and calls. He has great subcontractors and they come when scheduled, there have been no big surprises or big delays so far. In the end I will end up with close to the "average" kitchen remodel costs. I did customize my cabinets quite a bit and that bumped the price up perhaps five thousand but other than that I did not spend the moderate amount for my materials.

This post was edited by scrappy25 on Thu, Nov 20, 14 at 9:15