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Beware of Value-Killing Home Renovations

Jacuzzis and whirlpools are other luxuries that can be a hit or a miss for sellers. A young couple may love the additions; a family with small children may see them as a waste of space and potential hazard.

Renovating your basement, attic or garage into an additional room? That man cave or spare bedroom may fit your lifestyle, but buyers may lament the lack of storage space and place to park their car. A basement or dormer apartment may run contrary to local zoning and be a red flag during a home inspection. Converting a bedroom into an office may appeal to a work-at-home buyer, but eliminating that bedroom in the eyes of local assessors will decrease your home's value.

External additions can be problematic if your bigger and better house is out of character with the surrounding neighborhood in size and style. It can be even worse if your do-it-yourself project lacks professional polish. Even more modest improvements -- such as doors, windows or awnings -- can hurt if they don't match your home's architectural style.

The National Association of Realtors and Remodeling magazine publisher Hanley Wood surveys remodeling and exterior replacement projects as part of its annual Remodeling Cost vs. Value report.

Overall, the 2011-12 report estimates that homeowners would recoup an average of 57.7% of their investment in 35 different improvement projects, down from an average of 60% last year.

According to the report, seven of the top 10 most cost-effective projects -- nationally, in terms of value recouped -- are exterior replacement projects. It deemed fiber-cement siding replacement as the project expected to return the most value, with an estimated 78% of costs recouped upon resale. Vinyl siding projects were expected to return more than 69% of costs.

Steel entry door replacement was the least expensive project in the report, costing little more than $1,200 on average, and was expected to recoup 73% of costs.

Garage door replacements have seen prices fall more than 15% nationally and can be expected to return more than 71% of the cost. A "midrange attic bedroom" is expected to return 72.5% of costs upon resale, in part because it is "the least expensive way to add a bedroom and bathroom within a home's existing footprint." A minor kitchen remodel (budgeted at roughly $20,000) is expected to recoup 72.1% of costs. A wood deck addition is expected to make back 70.1% of its price tag.

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