When you’re looking to increase the value of the home that you’re planning to sell, it’s smart to know which home renovations will pay you back. Not all renovations are worth the cost, and when it comes to selling a home, most sellers want to invest in projects that generate higher returns.
Remodeling Magazine has released its Remodeling 2018 Cost vs. Value Report, which analyzes most common renovations home sellers can make and what specific projects may offer the highest return on investment (ROI).
To compile this data, the magazine asked RemodelMAX, a software company that estimates construction project costs, to estimate the cost of 21 popular remodeling projects in 149 different markets nationwide – based on the same materials, number of hours and workers. The magazine then gave these numbers to real estate professionals, who estimated how much the home’s value would increase after the project was completed within a year of the sale.
What projects have the best shot at improving your home’s value
The cost of the projects included in this survey ranged from $1,471 (entry door replacement) to $256,229 (master suite addition), and the average payback in a home’s resale value was 56 percent of the cost of the remodel. The ROI varied widely depending on the type of the project.
Garage door replacement
- Cost: $3,470
- Resale value: $3,411
- ROI: 98.3 percent
According to the report, installing a garage door replacement is one of the best ways to increase home value. A new, functioning garage door can not only improve curb appeal, but also help improve insulation, potentially lowering a home’s energy bill.
Siding replacement – manufactured stone veneer
- Cost: $8,221
- Resale value: $7,986
- ROI: 97.1 percent
Replacing some siding with a manufactured stone veneer can create a “high-end” look to your home. Manufactured stone veneer refers to siding that resembles real stone and usually costs less than natural stone. This material weighs less and is easier to work with than real stone, making it advantageous for builders to use. In the study, a 300-square-foot strip vinyl siding from the attached garage to the corner of the side addition was replaced with manufactured stone veneer, framing the door and entranceway of the house and giving the home a more polished, refined look.
Entry door replacement (steel)
- Cost: $1,471
- Resale value: $1,344
- ROI: 91.3 percent
First impressions make a big difference. Improving the entry door can dramatically enhance curb appeal and elevate the overall look of the home. A steel door offers a polished look and gives potential buyers an impression that the rest of the home is as new and modern.
Additionally, steel doors are usually more durable than wood doors and have layers to help resist forced entry. Since they’re also known to be extremely durable and insulating, they will serve as good selling points to potential home buyers.
Minor kitchen remodel
- Cost: $21,198
- Resale value: $17,193
- ROI: 81.1 percent
Many buyers view the kitchen as the true heart of a home, which is why kitchen remodels generate a high return. An upgraded attractive kitchen is the room of your home that can make or break the sale for many potential buyers.
In this study, a dated 200-square-foot kitchen with 30 feet of cabinetry and countertops was given a remodel. It included replacing flooring, repainting trim, adding wall coverings, replacing cabinet fronts with new shaker-style wood panels and drawer fronts, adding an energy-efficient cooktop/oven range and refrigerator, replacing countertops and installing a mid-priced sink and a faucet.
- Cost: $19,134
- Resale value: $13,422
- ROI: 70.1 percent
A bathroom is an essential part of any home, but one that is often overlooked. When buyers tour homes for sale, the kitchen and bathrooms are often on top of their list of rooms to have a close look at.
The bathroom remodel in this study included a new ceramic tile floor, replacing all the fixtures including the tub, adding a vanity counter with an integral sink and recessed medicine cabinet with light.
Based on the projects surveyed for the report, replacement jobs offer the most bang for your buck. The top replacement jobs on the survey list were all exterior projects (e.g. garage door, siding, entry door) and cost significantly less, averaging $13,197 as opposed to the $69,630 average cost for the remodeling jobs (e.g. bathroom or kitchen remodel). As a result, external replacement jobs have a higher return on investment than remodeling projects (76 versus 56 percent).
If you’re a home owner who’s considering investing in some upgrades to increase the resale value of your home, you’ll want to prioritize the projects that offer the most bang for the buck. Examine your finances and evaluate what you’re able to pay for. If you decide to make changes, you’ll want to time the renovations accordingly to ensure that your updates will be completed when you’re ready to sell.
If you have the time and the passion for a DIY project, you should consider completing some of these renovations on your own. Not only will you save some money, but also sharpen your handyman skills.
Complete data from the Remodeling 2018 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.
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