Home Renovations That Pay Off
When It Comes Time to Sell

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My brother-in-law Brian and his wife Colleen are in the process of renovating their home in northern New Jersey, for both practical and aesthetic reasons. They have changes in mind they think will make their home a nicer place to live, but they also plan on selling in the not-too-distant future and know their home needs improvements.

They plan on tackling two major projects: an overhaul of the master bathroom and adding a front porch, with some accompanying improvements to the landscaping of their front yard. The total price tag, they estimate, will be around $35,000. Beyond the normal anxieties of a renovation -- potential cost overruns, dust and debris and workers in your home -- Brian and Colleen wonder if the improvements they have in mind will pay for themselves when the time comes to sell. Perhaps they'll make a little extra. Or perhaps they won't be able to recoup all of the investment.

Brian and Colleen's first project is a much-needed overhaul of the master bathroom. It's frozen in time circa the Johnson administration -- black and pink tile, anyone? -- with fixtures and cabinets that are weathered and in need of replacement. They estimate that updating the room with new tile, fixtures and cabinetry will cost about $15,000, but feel the project is a must for presenting the house to a buyer.

Are they right? In an effort to find out, I consulted the "2005 Cost vs. Value Report," an annual guide published by Remodeling magazine and the National Association of Realtors that estimates what various home projects will pay back at resale. (The construction-cost estimates include labor, material, sub-trades, and contractor overhead and profit.)

According to the report, the renovation Brian and Colleen are planning falls into the category of a midrange bathroom-remodeling project. The average cost of such a project to homeowners in the East is $10,978. (An upscale remodel -- glass-blocked shower, stone counter tops and bidet included -- averages $26,950 in the East.) Brian and Colleen's $15,000 estimate may be a little high, though that will depend quite a bit on what materials they choose.

The good news: Refurbishing a master bathroom is "one of the top three most cost-effective home renovations," says Holly Slaughter, a spokeswoman for information Web site RealEstate.com.

Indeed, the latest Cost vs. Value Report determined that a midrange remodeling project will net 104.4% of the original cost. (Upscale projects are slightly less cost-effective, however, returning just 97.3%. Installing marble counters in the loo? Do it for yourself, not in hopes of a big payday.)

This kind of project wasn't always so highly valued by home buyers. A decade ago Brian and Colleen could expect to recoup just 77% of the cost of a bathroom remodel, according to Remodeling magazine.

Colleen and Brian's second project, which is already in the works, is designed to boost the home's curb appeal -- and fulfill one of Colleen's wishes. Colleen said she fell in love with a nearby home with a Victorian-style front porch, a look she decided she wanted for her own house. The redone front yard's new Japanese maple and butterfly bushes will also fit in better with their neighborhood's more-modern landscaping designs.

My husband Gerry and I understood the need to make over the dated bathroom, but we asked Brian and Colleen why they were investing so much in redoing the front of their home when their back porch and yard could use some updating. Since Brian, Colleen and their four-year-old daughter Rylina spend most of their leisure time in their backyard, an investment there seemed like it would offer lifestyle dividends in addition to any benefits when they sell. Colleen maintains the front porch needed an upgrade more, and says she's thrilled with how the project is coming along -- which has convinced Brian that the project is worth the cost whether they get their investment back or not.

The Cost vs. Value Report doesn't differentiate between front porches and back porches -- the nearest approximation I could find for what Brian and Colleen are doing is a deck addition. A deck addition in the East cost an average of $11,366 (landscaping not included), and typically recouped almost 96% of the projects' costs. (The national average isn't as good news: Roughly 90% of costs are recouped overall, with homeowners in the South getting back just 83% of their costs, on average.)

Outdoor space has become more valuable to home shoppers over the years as well: The magazine's 1996 Cost vs. Value Report found that homeowners who made deck additions recouped just 72% of the total cost of the project.

Brian and Colleen's new front porch and landscaping should improve their home's curb appeal -- that first impression a potential buyer gets when seeing a house. RealEstate.com's Ms. Slaughter says that's important -- better curb appeal joins an improved master bathroom and an updated kitchen on her list of top three most-cost-effective renovations. But she warns not go overboard: "You don't want to be the Joneses of your neighborhood." Moreover, she also cautions about doing anything that will change the character of your home, noting that "you can go from being the Joneses to being the Addams Family of the neighborhood."

Keeping up with the Joneses is all too human, and a desire we all have to guard against. I've felt its pull myself, of course. Earlier this year, Gerry and I went back and forth over whether to add a pool or a hot tub in our backyard. I wanted the pool: For years now I've watched our son Gerald stare longingly out the window at our neighbor's family having fun in their pool. I wanted a pool for Gerald -- mostly. But part of me also wanted it because I never had one as a child living in the city, and I've always felt a pool in the backyard was one of the perks of living in the 'burbs. To be sure, we're one of the few homes in our neighborhood without one.

As I wrote in a past column, Gerry was adamantly against the pool, insisting a hot tub would be much less expensive and just as enjoyable. The letters I received after that column convinced me Gerry was right, that the maintenance hassles and increased insurance weren't worth it. But when I think of the memories Gerald won't have of fun times in his own pool I sometimes wish we'd been a little less practical.

Gerry and I have agreed on other home improvements, though. A few years ago we gutted our kitchen and converted it, the living room and the dining room into one great space. That required some costly structural changes to our home, for a total cost of $40,000.

The Cost vs. Value Report's best fit for our project is a mid-range kitchen remodeling. Here in the East, the average such project cost about $44,659. (The national average is $43,862.) The good news is if we did have to sell we could expect to recoup roughly 95% of those costs. Kitchen remodeling projects tend to hold their value at resale over the years: A decade ago homeowners who upgraded their kitchens could expect to reclaim 90% of the cost, according to Remodeling magazine.

We wouldn't do as well on a family-room renovation we finished last year. We spent about $10,000 to move some windows and doors and install a new fireplace, compared with an average cost of $13,688 for a home-office remodeling project in the East. (Our family room isn't a home office, but we did much of the same work. We saved some money because Gerry and a friend did some of the work themselves.)

The Cost vs. Value Report indicates a remodeling project like this one won't pay off as handsomely as our kitchen remodel: In the East, home-office remodeling projects typically recoup just 75% of their costs at resale.

Still, that's OK with Gerry and me. Brian and Colleen are on the move, but we plan to live in our home for the rest of our lives. So the improvements we've chosen to make are driven not by what we can get back, but by our desire to have a home that's as warm and inviting as we can afford. That's reason enough to make renovations, whether they're cost-effective or not.

Which home remodeling projects paid off most for you – and which do you wish you hadn't done? I'd also love to hear from homebuyers out there on what you look for when evaluating homes for sale. Write to me at fiscallyfit@wsj.com. Or you can join me a continuing discussion at my forum on home-remodeling projects.

Online grocery shopping has been a life-transforming event for some shoppers, but a hassle equal to the task of doing it themselves for others. That's what readers responding to last week's column said, with a few fondly recalling shopping with their mothers as young children. Read on for their letters, or join me in an ongoing discussion on online grocery shopping in my forum. (As always, letters have been edited).

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My wife and I have been confirmed online grocery shoppers for years. In our area you simply drive through a special lane at the grocery store, use a two-way speaker to give your name, and they bring the order out to you. It can take five to 10 minutes depending on the size of the order and the store -- it seems the longer the store has been providing the service, the less time it takes them to bring it out.

We easily save an hour or more, spend less because as you said it cuts down on impulse shopping, and we don't have to drag the kids along with us. My only concern is that if one of my children runs for president someday, she or he might not know what a gallon of milk costs!

-- Aneil K. Mishra

We recently discovered online grocery-shopping, and it was a life-changing event. No more packing up the two toddlers and the baby and going through a two-hour shopping ordeal. Our orders rarely have any errors. Welcome to paradise.

-- Michael Wallace

My wife and I just moved to London from Houston and online shopping is much bigger here. We don't have children, but between my work commute and my wife's MBA studies that extra hour to spend together on the weekend is well worth the £5 fee. On the flip side, dry-cleaning costs here are up to 10 times what they are back home, so we end up doing more laundry than we ever have in the past. I guess you can't have it all!

-- Gre Milligan

I have a lot of fond memories of running errands with my mother when I was a little girl. I didn't care what we were doing, I just enjoyed spending time with her and learning about things that adults do. We'd talk about the foods needed for a specific recipe and I even got special treats for coming along!

-- Tammy M. Camillone

I'm retired and I don't consider in-store grocery-shopping drudgery. When I was working, it was a way to de-stress. I shop once a week and it takes me about one-and-a-half to two hours. Online shopping may help you to avoid impulse purchases, but you miss markdown items -- my beef/pork bill is probably 60% of what it would be without markdowns – and new items that might be of interest. I'm picky about both meat and produce, so I can't imagine letting someone else choose that head of broccoli for me.

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PROJECTS THAT PAY

AND THE PROJECTS THAT DON'T

*National Average.
Source: The 2005 Cost vs. Value Report.
 

Email your comments to rjeditor@dowjones.com.