The full cost of a remodeling project is rarely reflected immediately in the value of a home, especially when home prices are down. Furthermore, most homeowners who make whole-house energy upgrades stay in their homes to reap the benefits. Consequently, we have little historical data on how these upgrades affect resale value.

If you are considering selling your home soon, only cosmetic improvements, such as painting or visible repairs, will increase your home’s value. If you plan to stay in your home, consider instead how the upgrade will increase the home’s value to you; greater comfort and lower energy costs are immediate tangible returns on your investment. The financial value of your home will increase over the long term.

Cost vs. Value, National Average

Type of Remodel

Cost

Resale Value

Cost Recouped

Deck addition

$10,350

$7,259

70.1%

Window replacement (wood)

$12,229

$8,258

67.5%

Bathroom remodel

$16,552

$10,293

62.2%

Roofing replacement

$21,204

$12,257

57.8%

Source: Remodeling magazine, “Cost vs. Value Report 2009–10

If you sell your home in the future, the key to ensuring a high return on your investment is to tell the Realtor and appraiser about any improvements you’ve made. Keep copies of your home performance assessments, product labels, and energy bills, before and after remodeling. Show your appraiser the R-29 insulation in the roof and the invoice for the new high-performance furnace, along with the performance assessment and the lower utility bills. A knowledgeable appraiser will check the energy efficiency box on your appraisal form and indicate increased value.

Another way to establish the increased value of your remodeled home is to have it certified through a green-building program. A study done by Earth Advantage Institute in Portland, Oregon, found that green-certified homes in that region sold for an average of 30% more than non-green-certified homes, based on sales of existing homes between May 1, 2010, and April 30, 2011.

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