As house values drop across much of the country and loans become harder to get, homeowners are finding themselves with fewer easy-money options for lavish remodels. Instead, they're going after projects that cost less at the outset or garner practical savings -- or both -- and hold their value when it comes time to sell.

Rather than grand kitchen and bath upgrades that expand and rejigger floor plans, many homeowners in the middle price range -- that's under $500,000 in most markets -- are ordering modest, practical, recessionproof improvements that build a home's long-term value while, for example, boosting energy conservation and allowing owners to settle in and enjoy the place, since they're unlikely to turn a profit on it right away.

Erik Anderson, co-owner of Anderson-Moore Builders in Winston-Salem, N.C., says clients tell him, "I'm going to batten down the hatches and fix this place up and live in my house for a while."

Data from Remodeling magazine’s annual Cost vs. Value Report show that higher-priced remodeling projects are recouping less of their cost in 2007. In 2003, the average return on investment after one year for upscale remodeling projects was 82.5% of the cost to build. That dropped to 75.5% last year and to 70% in 2007. 

At the high end of the market, however, lavish improvements live on. Paul Zuch, of Capital Improvements in the Dallas area, says about half his clients still pay cash for jobs that cost, on average, $500,000. Despite the report in Remodeling, "They want the heated floors and multiple body sprays and all the bells and whistles and tricks they can put into these projects," he says.

The rest of us, however, might want to consider these five recessionproof projects that remodelers say can boost a home's value down the road while garnering practical and immediate payback.

A pared-back kitchen upgrade
If you lust for a gorgeous new kitchen, take heart: You can get a handsome upgrade that won't require you to sell your children to pay for the project. You'll
enjoy highly visible changes right away while investing in a higher resale price. Such scaled-back kitchen remodels earn back an average 83% of the investment, according to the Remodeling magazine survey.

To trim costs, confine the work to cosmetic improvements. Rethink fully replacing your existing cabinets. New cabinets are the biggest single item in a kitchen remodel; you'll save around 25% of the total cost by keeping the old cabinet boxes and replacing only the faces and hardware.

Save still more by staying within your kitchen's footprint. In his market, says Houston-area remodeler Dan Bawden, $35,000 to $40,000 will buy you a kitchen "face lift," including the installation of new cabinet fronts and hardware, a sink, drywall and paint, flooring, lighting and granite counters, and leaving $6,000 for new appliances.

By comparison, a full remodel of a 10-foot-by-10-foot kitchen -- moving walls and replacing cabinets, appliances, lighting and flooring -- costs about $70,000, says Bawden, who owns Legal Eagle Contractors (he's a remodeler and a lawyer).

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Besides granite, he also likes working with Silestone, a low-maintenance quartz composite that's 10% to 15% less expensive than granite. (It has anti-microbial materials mixed into the binder, and you can cut food or place a hot pot directly onto it without marring the surface.)

"The trick," Bawden says, "is to do things that have high bang for the buck." Instead of choosing top-of-the-line everything, select just one or two treasured elements to splurge on for a personal touch: a kitchen or bathroom backsplash of handmade tiles, for instance, or a high-end sink mounted flush with the counter surface.

Pared-back bathroom remodel
Apply the same philosophy to remodeling the bathroom. Say you have a room 5 feet by 8 feet. To gut everything, install new cabinets, granite countertops, sink, tub and shower, toilet, tile floors, lighting, vent fan, paint, wallpaper and a new window, you'd pay about $18,000 to $20,000.  

Here's the scaled-down version: Reface existing cabinets with new doors, drawer fronts and hardware. Top the counter with stone. Forget the new window. Leave the tub where it is and put new tile around it. Repaint or wallpaper, replace the toilet, vent fan and mirror lights, and install a new tile floor. The cost drops to between $14,000 and $15,000 -- a savings of about 25%.

Discuss:  Talk about it: Do friends help or hurt your remodeling efforts?

If you're really on a budget, repaint the cabinets rather than refacing them. Install new knobs, towel bars, a stone counter, faucet and sink. Repaint the room and add a new light and vent fan. Tile the floor but not the tub. It'll cost around $6,000 to $8,000. Whichever option you choose, you've made changes you'll enjoy for years. A remodeled bathroom boosts the price of your home, and you'll recoup 78% of the investment on average, according to Remodeling's survey.

In-law apartments
Creating an apartment for aging parents or for adult children is another way to squeeze double benefits from a remodeling investment. Once the apartment is no longer needed, rent it out for extra income. (Just be sure to check with your local zoning department first.) Or use it as guest quarters, a teenager's living space or an exercise or hobby studio.

Bawden says he's done a few of these so-called mother-in-law additions in the past, but now there's "a gush" of requests. Many baby boomers, he says, are asking, "Do we want to blow Mom and Dad's savings on assisted living and completely deplete their resources in a few years, or do we want to bring them home?"

The huge baby-boom generation will be dealing for years with elderly parents, so an in-law unit is likely to be attractive to home buyers. But to be sure it will pay off in your area, ask an experienced real-estate agent.

Besides the savings from consolidating households, the added square footage adds to the resale value. Homeowners who spent around $98,000 on master suite additions earned back an average of 69% of the cost when they sold the house, the Remodeling magazine survey found.

In Houston, a one-time investment of $80,000 to $130,000 buys a 400- to 500-square-foot in-law addition, usually to the back of the existing home, Bawden says. He recommends a ground-floor living room-bedroom combination with a bathroom and perhaps a kitchenette. For older occupants, create a home that's navigable in a wheelchair, if necessary. That includes wide doors with no thresholds, bathroom grab bars, and closets, showers, kitchens and sinks that can be approached in a wheelchair. (Read "" to learn more.)

When adding an independent living space:

  • Make the transition into your home one that can eventually be closed and locked, with a wide, wheelchair-accessible door and strong casement.
  • Build a separate outside entrance with pavement for easy entry.
  • Make sure the addition is consistent in every way -- from the quality of workmanship and materials to the design -- with your existing home. A jarring difference between the house and addition can subtract from the resale value.

New exterior siding
Wrapping your house in a new, weather-tight shell of siding delivers a lot of zing for a relatively small cost. The exterior becomes new, which can distinguish your home in a crowded resale market. You can earn back an average of 83% on a $10,000 investment, plus your heating bills drop immediately. The higher fuel prices rise, the smarter you'll feel. Some siding products even have a bonus: little or no maintenance.

There are a lot of choices for replacement siding, including vinyl, acrylic, fiber cement, metal and wood. As you compare them, balance the cost, insulation, color durability, strength, ease of maintenance and, of course, attractiveness of each.

Bob Birner, vice president of Amazing Siding and Windows in Tomball, Texas, believes acrylic is the best recessionproof candidate because it gives the best look and most insulation for the least cost. You won't need to remove old siding, unless it’s rotted or damaged. Acrylics do a good job of mimicking wood's thickness and variability (pros call this the siding's "shadow line"), and acrylic comes with a foam backing that has an insulation rating of R-4 -- hard to match with other replacement sidings. (R ratings of 1-3 are typical for siding, with the highest possible rating being R 4.8.)

Siding costs vary depending on your home, your contractor, your region and the product you choose (an example is Crane Performance Siding). Acrylic replacement siding costs between $10,000 and $20,000, installed in his area, Birner says.

Acrylic is solid and low-gloss, unlike hollow vinyl siding, which has a plastic sheen. Colors are baked on in the factory, so you won't need to paint. Ever.

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That's all some homeowners need to hear. "Most people say, 'You know what, I'll be happy if I never have to paint again,'" says Birner, who co-hosts a radio show on remodeling in his city.

A caution, though: Make sure you love the color. Because you can't paint over it. That's the color your home is going to stay.

For more flexibility, consider fiber cement (Hardie board is a popular example). Replacing siding with fiber cement runs roughly $15,000 to $25,000. You should remove your old siding, though, and add insulated sheathing for improved energy efficiency. The maximum insulation you can achieve with fiber cement is R-3, Birner says.

To stretch your investment, check here for state rebates or incentives on energy-efficient siding.

Replace your windows
Here's another double-duty investment: Jazz up your home's exterior by replacing old windows that bleed costly warmed or cooled air into the atmosphere. New windows that are tightly constructed and filled with insulating gases can make a big contribution to your home's energy efficiency and bring down your heating bill. They also dress up a home to pay you back at resale: On average, nationally, homeowners who spent $10,000 to $11,000 on window replacements recouped 80% when they sold the home, according to Remodeling's survey.

Window efficiency is rated by its "U-factor," from 0.1 to 1.2. The lower the number the better, and the more it costs. For Energy Star ratings recommended for your region, check the University of Minnesota Efficient Windows Collaborative's chart. But you don't really have to worry about U-factor comparisons. Just look for the government's Energy Star seal. If you don't find it, keep shopping.

An efficient, 3-by-5-foot window framed in vinyl runs between $500 and $800 installed, Birner says. Remember, though: You can't repaint vinyl.


If painting is important, consider windows framed in fiberglass, such as Marvin's Infinity line -- about $650 to $900 for a 3-by-5-foot window. Or, look at Andersen's Renewal line: These windows, framed in a composite material of reclaimed wood fiber and polymer, cost $700 to $1,000 for a 3-by-5-foot opening. You can even choose stainable wood trim for the window interiors, which adds at least 35% to the cost. (See a primer of window components.)

If your local building code requires tempered glass, budget about $150 more per window. To ease the pain, check here to see if your state offers rebates or incentives.

By investing in one of these recessionproof projects, you'll feel better about owning your home, even in the face of gloomy housing forecasts.