Home Projects With Big Payoffs
Stretch your dollars with home improvements known to yield high ROI.
Whether you’re remodeling for your own pleasure or with an eye to a future home sale, your home improvements represent a significant investment. Careful planning and decision-making can help you reap the best return on that investment (ROI).
“Well-planned and executed home improvements make your house more livable while you live there, and they boost your home’s resale value,” says Angie Hicks, founder of Angie’s List. “If you’re investing in your home specifically to help sell it, focus your dollars on the things that will really wow a potential buyer.”
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First Things First
Most home improvements and remodels don’t recoup their entire value. This means you need to keep a realistic perspective when making remodeling decisions.
“The biggest misconception that I’ve come across is that not every project in your home increases the value of your home,” says Gavin Frost, real estate agent with Frost and Associates in Indianapolis. “A lot of projects that need to be done preserve the value of your home. And by doing them now, you’re going to get dinged less in the market.”
Don’t neglect essential infrastructure, such as electricity, plumbing and HVAC. You may not get a good ROI on a highly efficient new HVAC system, but buyers will expect to be able to flip a switch to make the essential systems go.
Look to the Outside
Projects that boost curb appeal are known to yield some of the highest returns on investment. Anything that improves the exterior appearance of your home and catches the eye of a prospective buyer can recoup a lot of its cost.
In its 2018 Cost vs. Value Report, Remodeling magazine attributes the biggest ROI to the most visible home improvements. A steel entry door replacement recoups 91.3 percent of its cost, for example. And manufactured stone veneer can recoup 97.1 percent of its cost. A high-end garage door replacement, one of the most visible of all improvements, can recoup 98.3 percent of its cost!
Deck additions have always been popular upgrades for strong ROI. Remodeling magazine estimates an 82.8 percent return, particularly for wood decks. A deck addition can cost you upwards of $10,000, so it’s definitely among the more expensive projects you could tackle.
Garage door replacement: 98.3%
Steel entry door replacement: 91.3%
Wood deck addition: 82.8%
Siding and facades: 76.7%
Improving siding and home facades also gets results. This high-visibility job can sharply crank up the wow factor. Expect a 76.7 percent return.
Prioritize Kitchens and Bathrooms
Kitchen remodels present another evergreen prospect. You can expect an 81.1 percent return on investment from a $20,000 kitchen remodeling job. Real estate agents note that potential buyers spend more time inspecting the kitchen than any other room when they’re looking at a house, so investment in that area can really pay off.
Kitchen Remodel: 81.1%
Bathroom Remodel: 70.1%
Real estate agent Gavin Frost says solid surface countertops go a long way for return on investment.
Bathroom remodels also fetch high value, particularly if you incorporate universal design. The design of your bathroom sends a powerful message about your house, so prospective buyers pay a lot of attention to the bathroom. Expect more than 70 percent ROI from this project.
Kitchen and bathroom remodels consistently improve home value for a simple reason: They improve livability and make the house a more useful and up-to-date space.
Flooring: Floor quality offers instant insight into the home. Consider large-format ceramic tile and radiant floor heating to complete a high-end bathroom remodel.
Fixtures: Quality fixtures and useful features, such as hands-free bathroom faucets and soap dispensers, help your home stand out from others in the market.
Lighting: Improving lighting is a quick and easy way to make a big visual impact. Hire a lighting designer through Angie’s List today.
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Don’t Underestimate the Small Stuff
Sometimes, the most vital ROI comes from the most basic work. Applying a new coat of paint, spreading a fresh layer of mulch, trimming trees or planting new bushes – all of these projects can improve your home’s value with little cost and effort on your part.
“You want a neat, clean and de-cluttered appearance,” Frost says. “If you have an unfinished basement, go ahead and put the gray epoxy on the floor, as well as painting the walls white. A fresh bed of mulch goes further than you’ll ever know.”
If you apply that new coat of paint, go for neutral colors with widespread appeal. You want potential buyers to be able to envision themselves living in the space.
✓ Spread fresh mulch
✓ Apply epoxy to an unfinished basement floor
✓ Have trees trimmed
According to the Zillow 2017 Paint Color analysis, certain colors show improvements in home sale value.
Light blue: A cool, calming bathroom and kitchen color.
Light brown: An excellent neutral color for living rooms.
Dark blue/gray: An ideal and inviting neutral for front doors.
Not All Updates are Created Equal
Although these rules apply broadly across the nation, different regions, different neighborhoods and even different individual houses will involve varying priorities. If you really want to get the best bang for your home improvement buck, consult with a reliable real estate agent or remodeler to determine what’s best for you and your property.
Keep this in mind when making improvements: Converting a hobby room or bedroom into a livable space can improve value, whereas doing the opposite may not help much.
While ROI is important, it shouldn’t be your only consideration when prioritizing home projects. You should also place a premium on the projects that keep your house in good working order and maintain your property value.
Take care to address deficits in your home, such as an outdated electrical system. These projects may not show a huge return on investment, but you can be certain that buyers (and their home inspectors) will note poorly maintained infrastructure and adjust their offers accordingly.
Pay attention to your yard’s condition. It’s one of the first things potential buyers see.
While you’re at it, if you do decide to approach the work on a do-it-yourself basis, be sure you know what you’re doing. “A poor DIY job will not only fail to improve the value of the house, it calls the quality of the rest of the house into question,” Frost says.