For DIYers and potential real estate investors, fixer-uppers can seem like a fun and rewarding opportunity. The chance to show off your handy fix-it skills, while also turning a profit in the process? What could be better?
But fixer-upper properties aren’t always what they seem—and in order to ensure a return on your investment, it’s important to know the full scope of costs you’ll incur and how much you're likely to recoup long before purchasing the home.
If you're considering buying a fixer-upper, check out this guide on the average cost to gut and remodel a house—and make sure you’re ready for the financial commitment.
The chart below shows a breakdown of remodeling projects and how much they can cost you on average, along with the typical return you can expect.
When gutting and remodeling a house, the kitchen will likely be your highest-cost space. According to HomeAdvisor, the average kitchen remodel clocks in at over $25,000. Cabinetry, hardware, countertops, and flooring are often the most expensive items in this room, with higher-end items such as EnergyStar appliances and custom cabinetry adding additional costs to the ledger. Depending on the extent of the remodel, you'll likely see between 53% and 77% of that back in resale value—with higher returns on more minor remodels.
A bathroom remodel can run anywhere from $4,100 to $55,000, depending on the scope of the project. The costs of a bathroom renovation are highly dependent on the materials, fixtures, and hardware you choose, with items like quartz countertops, jetted tubs, and custom wood cabinets coming at a premium. The National Association of Realtors reports that bathroom remodels return around 58% of the cost in resale value on average.
For the most part, a roof only lasts a few decades, so if the bulk of the house needs renovation, it’s likely the roof does, too. Replacing a roof generally runs anywhere from a few thousand dollars to upwards of $40,000, depending on the materials you use. A basic asphalt roof typically clocks in under $10,000, while higher-quality ones made with tile or slate cost two to five times that. Most roof replacements will return at least 60% of the cost, and sometimes they can even bring a profit.
If the home requires replacing or adding vinyl siding, you can expect to pay between $6,100 and $16,000, according to HomeAdvisor. It generally runs around $7.50 per square foot of coverage. Thicker and more stylized siding options may cost more. There are other siding materials available, though wood and fiber cement are typically more expensive. The National Association of Realtors reported an 83% average return on vinyl siding installations.
Doors and Windows
Replacing all the doors and windows on a home can add thousands of dollars to your final costs. On average, full-house window installation runs almost $6,000, with larger windows commanding a higher price tag. Doors, on the other hand, cost about $1,000 just for one. Exterior doors are more expensive than interior ones, as are ones made of solid oak, beveled glass, wrought iron, and other high-end materials. Remodeling reported returns of 70% or more on window replacements.
There are a number of often-overlooked expenses that can impact your overall renovation costs, too. The biggest is typically labor. Contractors, plumbers, electricians, engineers, and other professionals all come at a fee—usually an hourly one. These fees vary greatly; plumbers typically ask for $70 to $120 an hour, while structural engineers can cost $300 or more, according to HomeAdvisor.
Some of the costs you’ll want to take into account include:
- Permits: Many renovation projects require a permit from the local building authority. There may be application fees for these, and you may also need multiple permits for different projects throughout the house.
- Adding, moving, or removing walls: Changing up the layout of your property can add significant expense to the project as well. Moving (or removing) load-bearing walls or walls where plumbing, electrical, or mechanical systems are housed will typically come with higher costs.
- Appliances: Replacing and installing appliances can also increase your costs to remodel. Generally, stainless steel appliances and energy-efficient ones will cost more.
- Flooring: Flooring costs run the gamut and depend largely on the size of the space as well as the material you choose. Installing carpeting, for example, only costs between $3.50 and $11 per square foot, while higher-end floors such as a nice hardwood can cost as much as $22 per square foot.
Any changes to the HVAC system on the property will add additional expenses to the project. A new air conditioning unit typically runs $5,600 or more, while new blown-in insulation costs almost $1,500 on average. Moving the home to a solar-powered system averages at around $24,000 total.
Getting the Most From Your Remodel
Some remodeling projects improve your home value (as well as your revenues once you sell the property) more than others. Make sure you’re choosing your remodeling projects wisely to ensure you get the most from your investment.
According to Remodeling magazine’s "2020 Cost vs. Value Report," remodeling projects with the highest ROIs include:
- Adding stone veneer siding (Resale value of $8,943 / Cost recouped: 95.6%)
- Replacing your garage door (Resale value of $3,491 / Cost recouped: 94.5%)
- Doing a minor kitchen remodel (Resale value of $18,206 / Cost recouped: 77.6%)
- Replacing old siding, fiber-cement (Resale value of $13,195 / Cost recouped: 77.6%)
- Replacing old siding, vinyl (Resale value of $10,731 / Cost recouped: 74.7%)
Other high-ROI projects include replacing outdated windows, adding a wood deck, or replacing your front door. If you’re not sure which projects will give you the highest returns on your investment, consider speaking to a local real estate agent about what features and amenities local homebuyers are looking for.