City of Pensacola Florida

Upscale Master Suite
Cost of upscale master suite: $137,891
Average resale value: $110,512
Percentage of cost recovered: 80.1%
Best return: 124.4% in Seattle
Worst return: 48.4% in Detroit

Creating a dream master suite with a sitting area, a large master bath with custom stone vanities, custom bookcases, a gas fireplace and a large walk-in closet will leave you with a fabulously high remodeling tab that won’t be repaid when you resell your home – unless you live in a luxury home in a high-cost area where the real estate market is hot.

A luxury master suite that makes you the envy of the neighborhood won’t make you money. "Don’t over improve for the neighborhood, you’ll never see return on your investment" warns Pam O'Connor, President/CEO, Leading Real Estate Companies of the World™, Chicago. "Consider other homes in the area before making such a significant improvement."

Family Room Addition
Cost of family room addition: $54,773
Average resale value: $45,458
Percentage of cost recovered: 83%
Best return: 113.3% in Albany, NY
Worst return: 55% Kansas City, Mo.

Adding a family room sounds like a smart remodeling investment, but it won’t be if you have to add completely new square footage to your home. On average, you’ll spend over $50,000 to build a 16 x 25 foot room and finish it inside with recessed lighting, hardwood floors, windows, patio doors and skylights and outside with vinyl siding.

Spend that same $50,000 to remodel existing unfinished space in your basement or attic and you can add a full size bath and a wet bar for the same money. You’ll also recoup closer to 90% on your remodeling costs at resale.

Whether your new family room is in the basement or on the first floor, make sure it matches the profile of the buyer you have in mind for your home. "Doing a lot of work on a downstairs basement rec room is fine for family buyer profiles," says Pam O'Connor, President/CEO, Leading Real Estate Companies of the World™, Chicago. "But if you hope to sell to empty nesters, it won’t help sell your home."

Upscale kitchen remodel
Cost of upscale kitchen remodel: $81,552
Average resale value: $69,194
Percentage of cost recovered: 84.8%
Best return: 136.1% in Seattle
Worst return: 46.2% in Burlington, Vt.

A top-of-the-line kitchen with commercial grade appliances, stone countertops, and custom cabinets will set you back over $80,000 and you won’t be getting that investment back at resale, unless you’re in a high cost area where that price tag is relatively small compared to your total home price, like Los Angeles, New York, San Francisco or Seattle.

When you go high-price, be careful not to go too high style. "I have a client that put in black lacquer kitchen cabinets with black granite countertops," says Mark Riley, president of Mark P. Riley Luxury Real Estate Group, Sarasota, Fla. "The kitchen looks pretty cool, but it only appeals to one in a hundred buyers. White cabinets with that black granite would appeal to many more buyers."

National averages courtesy of Remodeling Magazine's 2005 Cost vs. Value Report. © 2005 Hanley Wood, LLC. Reproduced by permission. Republication or dissemination of the is expressly prohibited without the written permission of Hanley Wood, LLC. "Cost vs. Value" is a registered trademark of Hanley Wood LLC. Unauthorized use is prohibited.