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Some home improvements pay off more than others

By Eileen Alt Powell

Associated Press

NEW YORK -- The arrival of spring signals to many homeowners that it's time to start redecorating and remodeling. Experts caution, however, that not all home improvements are good investments.

"Some things automatically add value, and others are marginal at best," said Greg Burie of American Express Financial Advisors in Boca Raton, Fla.

Landscaping, for example, adds to "curb appeal" if a family plans to sell in the near future, he said. "It's also something you can do at a deep discount," he added, suggesting that homeowners can invest in young trees or shrubs that cost much less than mature plants.

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Modernizing kitchens and bathrooms also can pay off on resale "with people cocooning a lot more," Burie said. Decks and sun rooms can also add value to a home.

But before homeowners rush to change it all, they need to keep in mind that they have the best chance of recouping their costs when they sell their homes if they invest in tasteful changes that don't go beyond the norm for their neighborhoods.

A lot of money can be at stake. Americans plan to spend an average of nearly $3,800 this year on home improvements, up from $2,900 in 2000, according to the American Express Home Improvement Index. More than two-thirds of homeowners say they'll do the work themselves, the survey found.

Nearly 90 percent say they believe the work will increase the value of their homes, and 80 percent hope to recover costs when they sell.

Going neutral

David Chatham, 36, a publicist with Brodeur Worldwide, believes he'll benefit from the work he's doing on his home in Raleigh, N.C.

The bathroom decor, which dated to the mid-1980s, "was really unattractive," he said. So he and his fiancee recently removed the floral wall paper and had the pink tile replaced with tile in a neutral tone. They also added new light fixtures and are considering upgrading the vanity.

They plan to tackle the kitchen next, probably replacing the countertops and repainting.

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He believes he'll get back some of his investment if he sells the house, as planned, in about a year.

"There's an intangible, too, which is that the changes probably will help the house sell faster," Chatham said.

Mari McQueen, associate editor of Consumer Reports magazine, said families contemplating major renovations should consider hiring an appraiser to give them an idea of how much value a planned project will add to their homes.

"This is generally done by Realtors or architects or other people in the building industry," she said. "That's not necessarily the best way to go because to them, square footage automatically equals value."

Keep up with the Joneses

An alternative is for families to go to open houses to check out what the neighbors have done.

"The biggest bank for the buck is in keeping up with the Joneses, not going them one better," McQueen said. "You need to look at the overall square footage of your home, its amenities and the values of similar homes in the neighborhood."

She also warned that quirky remodeling -- such as turning a child's bedroom into a castle-like structure -- "may be OK if it's for the family's own pleasure, but they probably won't get their money on the back end when they're selling the home."

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Just what returns the most? Appraisers asked to evaluate a variety of projects for Consumer Reports said homeowners could recover up to 75 percent of the costs for major kitchen and bathroom remodeling and creation of an attic bedroom. Constructing a master bedroom suite and finishing a basement also paid off.

But building a deck, putting on a two-story addition and adding a family room or a sun room merited just a 50 percent cost recovery, the appraisers said.

For Christian Dickerson, 30, who works in the import-export business, this spring's redecorating project on his home in Littleton, Colo., was a labor of love.

While his wife Amy was away on a trip with their 6-week-old daughter Anslee, Dickerson tore up the carpeting in the dining area and family room of their home and, with the help of three friends, replaced it with a laminate tongue-and-groove wood floor.

"It really had to do with our thoughts about the baby's high chair," he said. "My wife ruled out having to put a mat or shower curtain under the chair. That meant we had to kid-proof the floor."

Dickerson said his wife's reaction on returning home was, "It's absolutely beautiful." And he has it on videotape to prove it.

www.americanexpress.com

www.consumerreports.org

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