Most profitable renovations
Some home improvements can recoup a lot, even all, of their costs.
By Les Christie, CNNMoney.com staff writer

NEW YORK(CNNMoney.com) - Renovating an old-fashioned kitchen or fixing up that grungy bathroom reaps a bigger return on investment than ever before, according to a recent report by the National Association of Realtors and Remodeling magazine.

Americans spent more than $139 billion on home improvements in 2004, according to Harvard's Joint Center for Housing Studies. Homeowners may recoup much of that expenditure in the form of higher prices when they resell their homes.

Recouping costs
How much of your remodeling costs you get back at resale
JobCostCosts recouped (percentage)
Upscale residing$10,393$10,771 (103.6%)
Midrange kitchen remodel$43,862$39,920 (91.7%)
Window replacement$9,684$8,681 (89.6%)
Midrange master bedroom suite addition$75,959 $64,419 (84.8%)
Family room addition$54,773$45,458 (83.0%)
Sources:National Association Of Realtors and Remodeling magazine

As a matter of fact, a homeowner can now expect to make money on some renovations. A mid-range bath remodeling, according to the report, costs an average of $10,499 nationally, but adds $10,727 to the value of the home. That means homeowners make back 102.2 percent of their remodeling costs.

The math for adding a bedroom suite to the attic is almost as positive. Putting in a 15-by-15 bedroom and bath costs an average of $39,188 and adds $36,649 to the home's value. That means 93.5 percent of the costs are recouped.

A deck addition returns 90.3 percent of its cost.

On the other hand, some of the poorest returns come from home-office remodelings, which produce just 72.8 percent returns.

Considering a renovation project? See how much it's likely to add to your home's value.

Never the twain . . .

There are many strong regional differences in the percentage of return on remodeling jobs. Westerners value window replacements highly; they return 103 percent of their cost out West compared with only 83.7 percent in the South.

A bath replacement generates a 111.9 percent return in the West and 104.4 percent in the East, but only 89.5 percent in the Midwest.

But an upscale siding replacement recoups far more of its costs in the East (114.9 percent) and South (103 percent) than in the West (98.3 percent).

Not that homeowners should undertake these jobs to turn a profit. Renovations should be done for pleasure, not profit.

"The best reason for a remodel is to enjoy it," said Stacey Moncreiff, editor of REALTOR magazine.

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Considering a renovation project? See how much it's likely to add to your home's value.

People make a lot of mistakes when they remodel. Click here for some you should avoid.

What's on your home improvement wish list? Click here to read about what your neighbors are thinking.

With all these additions, American homes are bigger than ever. Not everyone approves. For more about "Monster Homes," click hereTop of page

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