Home Improvements with the Best Return on Investment
One of the inevitable questions for every homeowner – whether you’re thinking about selling in the near future or not – is the real value of a remodeling project: How much will this improvement project add to the value of my home?
Every homeowner wants an improvement project to pay off. So where will you get the most bang – and green – for your buck?
It’s no myth that not all remodeling projects are created equal. Some renovations historically bring a higher return of your initial investment than others. While updates to the kitchen and bathroom are great time-tested investments for any homeowner, according to Remodeling magazine’s annual cost vs. value report for 2014, some of the improvements tied to the highest ROI might surprise you, as many relate directly to the systems and curb appeal of your home.
If you’re thinking about some home improvement projects, keep in mind that your return on value depends on a number of factors, such as the value of your home, its value in your immediate neighborhood, the current market conditions and how soon you sell following the improvements.
Here are six home improvement projects that bring the best return on your investment:
Replacing exterior siding with fiber-cement siding. This brought back 87 percent on costs on upscale projects across the national average in 2014. It’s stylish for upscale neighborhoods, is low-maintenance, and also adds to the all-important curb appeal of your home.
The new front door. The first thing a potential home buyer sees is often the front door. The report showed that a mid-level 20 gauge steel door produced a 96.6 percent return, not to mention the added appeal from the street with the right aesthetics. Doors don’t require maintenance, and can boost energy-saving claims.
New garage door, new look. They’re often not noticeable unless they need to be replaced, but they can improve a significant portion of your exterior for a minimum cost. Owners can install a four-section door with galvanized steel tracks for as little as $1,500. But the payoff is huge, with a 82.9 percent return on costs.
Turn attic space into a bedroom. A study by the National Association of Realtors in 2005 suggested that every 1,000 square feet of space added to a home boosted sales price by 30 percent. Converting extra attic space into a bedroom ranked third on the list with a recoup of 84.3 percent of costs. It’s popular and profitable, adding an extra bedroom – and perhaps bathroom – at little cost to reuse space.
Add outdoor deck space. Adding a simple wood deck – these materials keep costs low – as a transition between indoor and outdoor living space can have a big impact, earning back 87.4 percent on average.
A minor kitchen remodel. Kitchens are a hot-ticket item for buyers and a sure-fire investment for owners, especially in competitive markets. By giving the kitchen a face-lift – think new countertops, resurfaced cabinets, new appliances and faucets – owners can see 82.7 percent return according to the study. The money invested in a kitchen is noticeable, so keep the overall value of your home in mind and don’t over-improve while going traditional to reach the widest base of buyers.