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Remodeling projects are expensive and nearly always end up taking more time and causing more personal life disruption than any homeowner expects. And some projects that homeowners think will set their abodes apart and make them a “must have” when it comes time to sell, actually end up being the first thing the new owners want to see gone.
 
So if you’re going to invest in projects designed to improve your home’s value, it makes sense to know what remodeling projects will give you the most return for your money – and which ones could actually detract from your home’s attractiveness.

“Almost any investment that improves your home will bring you immediate satisfaction and an increase in home value when you eventually sell,” said Angie’s List Founder Angie Hicks. “But some projects offer more financial return than others. If you’re improving with an eye toward getting most of your money back, you’ll want to curb your enthusiasm for dramatic or highly unusual additions in favor of things that have more universal appeal.”

Summertime is the busy season for home improvement. While American consumers remain in bargain shopping moods, indications are that 2010 will offer opportunity for the remodeling industry.

Hundreds of thousands of consumers took advantage of first-time home buyers’ tax credits this year and are now considering improvements or repairs. A 2010 nationwide Angie’s List poll showed most members are planning home improvements. On average, those plans call for projects that will cost nearly 5 percent of their homes’ value.

Angie’s List, the nation’s leading provider of consumer reviews, has gathered consumer ratings on home improvement contractors for 15 years. The following information is based on a recent, nationwide survey of more than 500 remodelers and real estate agents and national remodeling statistics.

5 Remodeling Projects with the HIGHEST return on investment

1. The Kitchen – Whether it’s a major overhaul or a simple makeover, putting a fresh face on your kitchen is your best investment. A major update could cost more than $20,000, but you can expect at least an 85 percent return.
2. The Bath – An outdated bathroom can quickly spoil a sale, and it won’t be a pleasant space for you, either. Current trends of large showers instead of space-hogging garden tubs may serve you well, as will attention to classic features rather than unusual color schemes. A major update could cost less than $20,000, but yield an 84 percent return.
3. Decks – A new deck can cost a few thousand to tens of thousands of dollars, depending on size and materials used. Before you build, look at other homes in your area and build accordingly. If the deck is in good shape, your return could be more than 80 percent.
4. Siding – If your home’s façade is siding and it’s not in good shape, replacing or repairing the siding can bring instant freshness. You’ll likely spend at least $10,000, but you should get at least 80 percent back.
5. Window replacement – The energy efficiency of new windows is a clear benefit to switching out older windows, but in some cases, it’s a safety feature, too.  Costs depend on the number of windows you’re replacing, of course, and the type. Expect a return on your investment of at least 80 percent.

5 Remodeling Projects with the LOWEST return on investment

1. Pool – Unless your home is the only home on the block without a swimming pool, you’ll rarely get back even half of the money you pay to build one, and you can scare prospective buyers off because many don’t want the responsibility or liability of a pool. In-ground pools are expensive and can range from less than $20,000 to more than $60,000, depending on how expansive your design and materials.
2. Home Office Remodel – If you work at home, you’ll want a pleasant home office, but don’t get too carried away with it. Remodeling could set you back more than $20,000 and you’ll be lucky to get half that money back. It’s better to have a room that can clearly be used as a bedroom, playroom or other space without a lot of redecorating.  Expect a return of 57 percent.
3. Sun Room or Four Season Room Addition – These rooms can set you back more than $50,000 and they’re often beautiful bonus rooms. If you’ll enjoy the room and use it, it’s worth the investment. The return on investment is generally less than 60 percent, though.
4. Master Suite – Who doesn’t want an expansive private retreat even within their own home? Master suites are expensive, though – some can run into six figures – and the return is generally in the 60 percent range.
5. The Garage – Adding that third bay to your garage may make sense when your kids start driving, but it can be expensive – especially if it’s attached to your house. You may get as much as 60 percent of your investment back, but you may scare off buyers who don’t anticipate needing that much garage space.

How to hire the best contractor for your job:

• Know what you want: Before you begin talking with contractors, read remodeling magazines, search the Internet for designs and materials and put your ideas on paper to give potential contractors a better sense of your expectations.
• Name your pro: Consider what you realistically can accomplish on your own. For projects that involve more than three different service providers, a general contractor may be needed to manage your project. If you're eliminating walls, adding rooms or impacting structure, you may need an architect or structural engineer.
• Do your research: Ask neighbors and friends who’ve had work done for references. Check Angie’s List  for references and your local regulatory agency for licensing requirements and to check your contractor’s license, insurance, and bonding status. Get the names of subcontractors and ask their opinion of the contractor.
• Get estimates: Get at least three written estimates to review. Documentation is often the best ammunition you have if things go wrong.
• Call back: Don’t hire a contractor whose only contact information is a post office box or an answering service. Hire someone with a good presence in your community.
• Read the contract BEFORE you sign. Know the details of the contract, as well as how any change orders will be handled. Check that your contract includes a lien waiver, covering payments to all subcontractors who worked on the project. 
• Money matters: If your project will cost more than 30 percent of your home’s value, consider buying moving instead. Never pay the full cost of a project up front. Hold back at least 10 percent until the job is complete to your satisfaction and to your contract terms.
• Be patient: Regardless of size, all projects will include unexpected issues that may cost more or delay completion. Be prepared for stress as the project stretches on, work crews enter your home and materials may pile up. Know what your work crew hours will be so you can plan your life around them.

Angie’s List collects consumer reviews on local contractors and doctors in more than 500 service categories. Currently, more than 1 million consumers across the U.S. rely on Angie’s List to help them make the best hiring decisions. Members get unlimited access to local ratings via Internet or phone, exclusive discounts, the Angie’s List magazine and help from the Angie’s List complaint resolution service. Take a quick tour of Angie’s List and view the latest Angie’s List news.