Before starting a home improvement project, do you ever wonder if buyers will see the same value you do? Many updates are made just for you and your family, but some will deliver a bigger bang for your buck than others. Remodeling magazine has come out with their annual cost vs. value report. The report looks at the average cost of various home improvement projects and the resale value of those costs. We’ve broken down the results so you can get to work on the projects that will make a big difference at resale time.
1. Garage door replacement: best cost vs. value
Job Cost: $3,470
Resale Value: $3,411
Cost Recouped: 98.3%
When anyone pulls up to your home and parks their car, they’re staring right at the garage door. It makes a huge first impression, especially when it’s treated as the front door. I had a neighbor who updated their garage door so that it looked like a beautiful barn door. Suddenly, the entire home had a different aesthetic, which I loved. That one change was a dramatic one. When my neighbors decide to sell their home, they will certainly see a return on their investment not only because the door is new, but also because it has really added to their curb appeal.
2. Manufactured stone veneer: great ROI, better curb appeal
Job Cost: $8,221
Resale Value: $7,986
Cost Recouped: 97.1%
If your home is currently vinyl siding on vinyl siding, consider this home improvement. When done right, a manufactured stone veneer can really update a home and add a lot of cub appeal to the home. You will commonly see the stone veneer around the base of a home and the entryway. Manufactured stone is made of cement and other materials that look like real stone, but at a much lower cost. It is very hard to tell the difference up close, which is why the ROI is so high.
3. Entry door replacement (steel): simple DIY improvement project
Job Cost: $1,471
Resale Value: $1,344
Cost Recouped: 91.3%
Nothing says “welcome to our home” better than a beautiful front door. There is definitely a theme to this list of which home improvements offer the best value. A potential homeowner begins to assess whether or not they could see themselves living there as soon as they see your exterior. Remodeling magazine points out that a steel door will have a better ROI than a wood door, simply because a wood door is more expensive. Do an update if your door feels dated and unwelcoming.
4. Deck addition (wood): square footage that adds value
Job Cost: $10,950
Resale Value: $9,065
Cost Recouped: 82.8%
A future homeowner will want to host a housewarming party soon after they move in. Help them visualize a barbeque with loved ones with a deck. The outdoor living space is just as important as the indoor space. If you have to endure long winters, you may notice how much you appreciate your backyard when it’s warm. Potential homebuyers feel the same way. Your resale value is big if you add an appropriately sized deck.
5. Minor kitchen remodel: keep it simple to recoup costs
Job Cost: $21,198
Resale Value: $17,193
Cost Recouped: 81.1%
I was surprised that a kitchen remodel wasn’t number one. It seems like many home improvement shows focus on the kitchen because a complete remodel can yield some dramatic results. A minor kitchen remodel may be key. You want to remodel for your benefit, but be careful about appealing too much to your own personal tastes. If you plan on selling in the next few years, pick a countertop that has universal appeal. If you want to get the most back for your money, replace the front of your cabinets and purchase some new appliances instead of gutting the entire kitchen.
Prioritizing and Funding Your Projects
The improvements listed above are ones that you will want to enjoy for a while. Even though you may have a good return on your projects, you will need to save and plan. Take a look at your potential expenses and get tips on how to budget for your next renovation. Put your money in a high-interest savings account or research your loan options. Pick the projects that you are most excited about. It’s always a bonus to know that future home buyers will see the value as well.
Kathryn Pins is a marketing content specialist at Alliant. She’s passionate about finding and communicating meaningful financial information with Money Mentor readers. Kathryn is a saver who gets more excited about certificates and her Roth IRA than shopping. When she does spend her earnings, it’s on furthering her education, travel, unique experiences, and loved ones.
Reference: Pins, K. (2018) 5 home improvement projects with the biggest return. The Money Mentor Blog: Alliant Credit Union. Retrieved from https://www.alliantcreditunion.org/money-mentor/5-home-improvement-projects-with-the-biggest-return?utm_source=SIM&utm_medium=email&utm_campaign=NM_NE_1118&utm_content=mm-november-newsletter&utm_term=_438
The Affinity Team