WHAT ARE THE BEST HOME RENOVATIONS TO BOOST VALUE?
By Jessica Hudson | February 1, 2020
Renovations can make us happier in the places we call home, but some updates can add real value when it’s time to sell or refinance. Because some renovations - think an updated kitchen, new deck or remodeled bathroom - can get pricey, it’s helpful to know what kind of return you might expect before you decide to take on a remodeling project.
Why consider a home renovation?
Remodeling your home adds to your enjoyment, but it can also boost your home’s value over time. When you refinance your home, for instance, renovations will be taken into account when a property appraiser assesses your home’s current market value. A higher home value means you’ll have more equity, a lower loan-to-value ratio, thus usually earning you a lower interest rate. You might even be able to get out of private mortgage insurance payments if you have them.
When you go to sell your home, most buyers will want to see a clean, well-kept home with modern updates that’s move-in ready. Plus, if you live in a competitive housing market, your listing might be competing with other upgraded homes for buyers’ attention.
Renovations with the highest return on investment
Before you shell out big bucks for custom updates in your home, having a solid understanding of what renovations yield the highest return for the money is key. You also have to take into account your budget and your renovation goals.
Whether you plan to stay in your house for a long time or just a few years, it’s smart to know which home renovations add the most value. Here are the six home remodeling projects that deliver the highest returns, according to the Cost vs. Value report from Remodeling.com:
1. Garage door replacement
Average cost: $3,611
Average resale value: $3,520
Cost recouped: 97.5%
A good-looking garage door tops the list when it comes to getting cash back on your investment when you decide to sell your home. The estimate for this job is based on the cost of removing and disposing of an existing 16 x 7-foot garage door (or a two-car garage door) and replacing it with a new four-section garage door with heavy-duty galvanized steel tracks, assuming the motorized garage door opener is compatible. This curb-appeal enhancer will get you back almost every dollar you spent on it when you sell your house.
2. Manufactured stone veneer
Average cost: $8,907
Average resale value: $8,449
Cost recouped: 94.9%
Replacing vinyl siding with stone veneer on part of your home, such as an entryway, is a big curb-appeal upgrade for your home. For this project, existing vinyl siding is replaced with adhered manufactured stone veneer. This average cost estimate is based on installing 36 linear feet (LF) of sills, 40 LF of corners and one address block, with materials including two layers of a water-resistant barrier, corrosion-resistant latch and fasteners and more. This cosmetic improvement and accent design element is likely to catch the eye of a potential buyer and can allow you to recoup nearly 95 percent of your renovation costs.
3. Minor kitchen remodel
Average cost: $22,507
Average resale value: $18,123
Cost recouped: 80.5%
Creating a modern-looking and functional kitchen can add more than just value to your home: it can boost your enjoyment of everyday activities like cooking, entertaining friends and sharing meals with your family. However, potential buyers see the intrinsic value of this kind of upgrade. On average, you’ll recoup a little more than 80 percent of the cost of a minor kitchen remodel. In a remodeling project of this kind, you might replace appliances with new, more energy-efficient models, reface cabinets with new shaker-style wood panels, install new counter tops, replace hardware, install a new sink and faucet, add new flooring and repaint.
4. Deck addition (wood)
Average cost: $13,333
Average resale value: $10,083
Cost recouped: 75.6%
If you’re lucky enough to own a house with a big yard, having a wooden deck can be an extra enhancement to enjoy the outdoors around your home. The average cost of adding a wooden deck from scratch (estimated based on a 16-by-20-foot deck, including a railing system with pressure-treated wood posts, railings and balusters) is approximately $13,333. But the good news is that this feature, which also includes a built-in bench and planter, can hold more than 75 percent of its value come sale time.
5. Siding replacement
Average cost: $16,036
Average resale value: $12,119
Cost recouped: 75.6%
Old, dilapidated siding can make even the nicest house look worn-out. For the average home, replacing 1,250 square feet of old siding will cost you just over $16,000 and you’ll get back roughly three-quarters of that investment upon resale. This upgrade includes the factory trim at the openings and corners.
6. Entry door replacement (steel)
Average cost: $1,8026
Average resale value: $1,368
Cost recouped: 74.9%
You will recoup nearly 75 percent of your cost by replacing your main entry door with a 20-gauge steel door, complete with clear dual-pane half-glass panel, jambs and an aluminum threshold with composite stop. These doors come factory finished with the same color on the front and back sides.