Each year, the National Association of Realtors collaborates with Remodeling magazine to compare changes in job costs with Realtors’ perceptions of what those jobs contribute to a home’s price at resale. Once again, replacement jobs—such as siding and roofing—generated a higher return than larger remodels and additions.
In fact, the gap between the two widened 3.8 percentage points this year, as replacement jobs fetched an average return of 73.2 percent, while remodeling jobs recouped just 60.8 percent of their cost. Armed with this information, contractors can encourage customers to consider more exterior renovations because they offer the best value.
Consider the homeowner
Only five job types increased their cost-value ratio in this year’s report: midrange roofing replacement (up 5.9 percent); midrange garage door replacement (5.6 percent); 20-gauge steel entry-door replacement (5.4 percent); vinyl siding replacement (3.2 percent); and a fiberglass entry-door replacement (1.7 percent).
Curb appeal continues to drive the value of exterior replacements, which represented 20 percent of total homeowner expenditures in 2013. Clients who want to sell a home in the near future should especially pay attention to the age and condition of windows, doors, roofing and siding before listing the house.
“If a prospective buyer doesn’t find the curbside view appealing, then it’s very unlikely they will see the inside,” says Roone Unger, president of Exovations, a home exterior remodeling company based in Cumming, Georgia.
But the benefits of exterior renovation and repair extend far beyond the resale market for homeowners who have no plans to move anytime soon. Some clients seek to upgrade the appearance of their home because they understand the improvements will ultimately lead to a better quality of life the longer they reside in the house.
“They want to stay in the neighborhood, and they want to have their home fixed up as they get a little older,” says Douglas Sutton, CEO of Sutton Siding & Remodeling in Springfield, Illinois. “They’re looking to get everything taken care of before they hit those retirement years.”
Formulate the pitch
Aesthetics play a significant role in exterior replacements, but the gains in performance enable contractors to show customers a more tangible return on their investment. Clients who opt for new windows with low-e glass, for example, notice the drop in their heating and cooling expenses and appreciate the reduction of outside noise.
“It does help pay for itself, especially with the energy costs we have out there today that continue to rise,” Sutton says. “Anything we can do to assist consumers in keeping their bills at the same level or lower is very important to them.”
A thorough assessment of home performance before any replacement work begins allows contractors to pinpoint areas of concern. Conducting blower door tests as well as infrared imaging helps identify instances of air leakage and provides a roadmap for contractors to improve home functioning through exterior renovations.
“We really go after the air infiltration on the house,” says Andy Lindus, owner and chief operating officer of Lindus Construction in Baldwin, Wisconsin. “It’s going to be a much better-performing house when you are able to replace the entire siding and not just the paint job.”
Lindus Construction removes all of the existing trim, siding and underlayments from each home so the company can inspect for rotten wood and other potential issues. Then the firm installs any window flashings before applying a housewrap that boasts an R-value, which increases the insulation of each exterior wall.
“With siding and insulation—done right—we can cut 20 to 30 percent off their heating and cooling costs,” Lindus says. “But more importantly, we can make it a much more comfortable home.”
Consult the trends
Many homeowners who have pursued a siding replacement job in the past year have also looked into extending their front porch or enclosing it altogether, Lindus says. The most common siding material for the company has been an engineered wood product followed by seamless or boxed steel siding and then foam-backed vinyl.
“It seems the more personalized people can be, the happier they’re going to be, so they want to make something really pop on their house,” he says. “The color schemes are getting a little louder and brighter than just your typical browns and whites.”
In addition to unconventional colors, more homeowners intend to mix and match siding materials to create more visual interest. Manufactured stone veneer, a new addition this year to the cost-value report, ranked second among all jobs with a return of 92.2 percent, and presents contractors with another opportunity to upsell contracts.
“Fiber cement products expand and contract very little compared to wood,” Unger says. “Plus painted fiber cement surfaces weather much better than wood products and require less painting.”
The ability to demonstrate how different materials and colors will play out on a particular home becomes essential when clients make their initial decisions. Unger offers his clients a design process called EXOVISION in which he takes a photo of their house and gives it to an architectural designer, who creates a rendering that shows the new appearance.
“The combination of materials and color selections totally transform the look of the home without a major renovation of structural walls or rooflines,” Unger says.
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