Return on Investment for Home Remodeling

The cost of home remodeling projects in Seattle can be a bit shocking, but will your investment pay off?

Although there is no financial crystal ball (...don't we all wish there was?!...), here are some tips for making an informed decision:

  1. Find out the typical annual appreciation for homes in your neighborhood.  You can research data on neighborhoodscout.com, or ask a local real estate agent to provide you with data even more specific to homes like yours.  Using neighborhoodscout.com's 7% average over the last 5 years is a conservative approach, given that the past 5 years includes some of the recession recovery period and factors in both the most and least desirable neighborhoods.
  2. Research the immediate return on investment percentages for project types like yours.  The annual Cost vs. Value report published by remodeling.hw.net is a great resource.
  3. Answer honestly:  What is the least amount of time you will live here?
  4. Include both "hard costs" and "soft costs" when estimating Total Cost of Your Remodel Project.  (And don't forget to add things that might not be included in the contractor's estimate, such as appliances, cabinet knobs, decorative light fixtures, and accessories.)

Sample data:

Current Home Value = $800,000

Total Cost of Your Remodel Project = $600,000

Total Investment = $1,400,000 (assuming that you don't have any equity)

Minimum Number of Years (that you will live in the house) = 10

Immediate Return on Investment (ROI) Factor for project type = 70% (conservative, based on lowest end of the ROI range for upscale Seattle projects)

Average Annual Real Estate Appreciation (conservative) = 7%

Sample calculation:

First, calculate your immediate ROI Value.

Current Home Value + (Immediate ROI Factor x Total Cost of Your Remodel Project) = Immediate ROI Value

$800,000 + (0.70 x $600,000) = $1,220,000

Then use an online compound interest calculator to calculate your home's Projected Value at the end of the Minimum Number of Years.

Then, calculate your Projected Profit.

Projected Profit = Projected Value - Total Investment

$2,399,924.66 - $1,400,000 = $999,924.66

So, although you would have started out with more money invested than you could immediately recoup, in ten years time, you will have more than made up for it.  And, consider the intangible.  You need to live somewhere.  Why not live in a home that is designed to work well for you and will bring you joy for years to come?  I can help you with that.

 

Project Update: Woodinville

Finishes have started being installed at the Woodinville project.  I rarely post photos at this stage of construction because much of the fun stuff gets covered to protect it from damage, leaving me with photos of things wrapped in cardboard with blue tape. 

During design, I did some quick sketches to help the homeowners visualize the shape of the indoor pool area and also to coordinate locations of the air registers with the mechanical engineer. 

Here's one of those sketches: 

The curved beam you see overhead will support a track for transferring wheelchair users from a changing area in the bathroom to the pool.

Now that drywall is up, you can see the shape of the space in real life (although a different angle).  There is currently scaffolding being stored in the pool pit for putting the curved beam up when it arrives. 

The waterproofing and tile installation are underway.  Here is a sneak peek of the tile pattern in the bathroom area.  The large mosaic area slopes to a long, linear drain against the wall.  There will be an adjustable height tub on the left side and a showering area on the right side.  The whole room is designed as a "wet zone."  The green color you see is the waterproofing coating on the waterproof substrate, before the tile goes up.

In the master bathroom, cabinetry is being installed.  You can see the unique pattern of bamboo plywood on the face of the cabinet sides.

Although the pretty things that will be seen and touched every day are being installed and everything is moving along nicely, this phase of construction always SEEMS slow because of all the detail work that goes into the final stretch.  That, and the fact that things get covered up and protected as quickly as they can!  The first day that the homeowner will really get to see everything all at once will be the "punchlist" meeting, which is when the team gets together to create a final list of minor items that need to be completed before the contractor's final pay application is approved.

I can't wait to show you this project when it is finished!

Sneak Peek: Madison Park Before & After

Remember this house that I posted about a while back on Facebook?  The one that tons of realtors had shown to prospective buyers without selling it?  Just look at that stack of realtors' cards that was on top of the flyer on the kitchen counter... (and that wasn't even all of them!)

We finished remodeling all three floors a couple of months ago. In order to make better use of the square footage, we made significant changes to the floor plan on both the first and second floors while completely renovating the kitchen, laundry, and all the bathrooms.

My client just sent me these before and after photos she took of the kitchen from the same angle, and I wanted to share this little piece of the transformation with you! 

Remembering Elizabeth Wright Ingraham

REMEMBERING ELIZABETH WRIGHT INGRAHAM

This morning while driving to get coffee, I was listening to the usual pre-election ridiculousness on National Public Radio. I have only to wonder for a flash of a second what Liz would have thought of things (or of a certain candidate) in order to hear her voice and ROARING laugh — clear as a bell.  

Sidebar:  I would share what I can hear her say about that candidate, but this is not a political post. (And, now I can hear her say, “But, Carol… why NOT a political post?!  We all must SPEAK UP and DO something!”)

MY INTRODUCTION (a.k.a. ’THE INITIATION')

I had just moved to Colorado Springs and was working as an architectural intern in a small office.  Our office was right in the center of downtown, in the same building as a movie theater, a French bistro, a chocolate shop, and Liz’s two-story office, accessed through a narrow pedestrian alley.  Her office was next to a Thai restaurant, which always smelled like fried rice.

Liz loved hanging out will all types of creatives, of all ages. About once a month, several young professionals including several architectural interns, an architectural illustrator, and a landscape architect would pack their lunches and head over to Liz’s office to gather around her conference room table.  

I had no idea that attending the first time was a kind of initiation. When I got there, I noticed that the guys who invited me were unusually quiet. They had taken their seats, ready to observe the show. You see, Liz examined everyone who came through her office doors closely. If you weren’t up to snuff, you quickly became the target of an interrogation. If you did measure up, the energy shifted to banter. The interrogations were especially fun to watch (as long as they didn't shift over to you!)

For Liz and myself, it was banter.  Always banter.

Years later, I brought two summer interns from our office to lunch with Liz. It was my turn to sit back and enjoy the show. These girls were quite young, the kind of young that thinks nothing of wearing spaghetti-strapped sundresses and flip-flops to the office. Liz leaned in:  “What are the branches of the government?…You mean you don’t know?!...Who did you vote for?…What do you think of this legislation being proposed?…Do you read the paper...AT ALL? Watch the news?”  

One of them passed the test (barely, she was let off the hook after she correctly listed the branches of the government). The other did not.  

COLLEAGUESHIP

She was old enough to be my grandmother, yet we were peers. She introduced me to clients and her own children as “a colleague of mine.” This meant the world to me.  Back then, the only thing you could call yourself when you didn’t yet have your architect’s license was 'intern'… and this was when White House intern Monica Lewinsky was in the press, so it was a job title that opened itself up to some embarrassing comments. Not to mention the fact that everyone assumed that ‘intern' was synonymous with 'unpaid student'. (It’s not. You have to work for a minimum of 3 years under the direct supervision of a licensed architect as an intern before you can complete the examination process and actually call yourself an architect. Unlike doctors, who get to use the term doctor when they are still completing their residency.)

Over the years, I returned many, many times to Liz’s office.  With the group, without the group. It didn’t matter. I would drop into the office and shout up the stairs, “Hi, it’s me!” She’d answer with a enthusiastic, “Oh, CAROL! How ARE you? Come on UP!” And, when I’d leave, she’d send me off with, “Force on, Carol. FORCE. ON."

Success Story (and a new service option)

BEFORE & AFTER

BEFORE (left) & AFTER (right)

BEFORE (left) & AFTER (right)

Remodeled years ago, complete with an acoustical ceiling tile grid with fluorescent lights, this Craftsman Bungalow kitchen was long overdue for an overhaul. There was very little original charm left, other than the leaded glass doors in the breakfast nook.  Our goal was to restore vintage character while creating a highly functional kitchen that will eventually appeal to buyers.

The leaded glass doors were reused in the design of the custom china armoire, seen in the 'AFTER' image (above, right).

A new, widened opening from the kitchen to the dining room features a bar-height mahogany peninsula to make visiting while cooking effortless and to double as a serving counter. The opening was curved to match the existing openings exactly.

The antique telephone and mixer both work and are used frequently.

The antique telephone and mixer both work and are used frequently.

The retro-style fridge, vintage telephone, farmhouse apron sink, linoleum floors, and mix of reproduction and vintage light fixtures bring the charm to the foreground of what is now a functionally modern kitchen.

To see more photos, visit Houzz.

HOW IT STARTED

I was contacted by this homeowner after he attended my "Kitchen Remodeling for Vintage Homes" lecture at Historic Seattle.  The project had been on his mind for years, and he had already completed several other restoration/remodel projects in the house.  But, the kitchen posed a lot of design challenges and he knew he wanted to get it "right"... and by "right" I mean have it feel special and historic when he was done, not screaming remodeled now and outdated in 10 years.

GETTING IT RIGHT

What the homeowner needed here was for me to pull together the big vision, draw a detailed set of drawings that would get him off to a good start with his builder, and chime in on how to make semi-custom cabinets look custom and vintage before pulling the trigger on the cabinet order. He was comfortable taking on the shopping, daily supervision, and decision-making. And, his contractor was able to facilitate the permits.  So, really he just needed my help "getting it right."

DESIGN-ONLY SERVICES

As you can see, the results were fabulous!  Which has inspired me to offer design-only services to other projects that are well-suited for it.  Think that might be your project?  Contact me to talk it over.