Which home improvements yield the Best ROI?
by Tony Gilbert
The average homeowner may get back as much as 64 percent of a renovation when a home is sold that same year, according to a 2016 Cost vs. Value report from Remodeling magazine. However, not all home improvement projects are alike or equally valued by prospective home buyers.
If you are looking to sell in the near future, you may want to know more about which home improvements may serve to boost your home’s value in the eyes of a buyer. Interestingly enough, it is not always the wow factor that boosts ROI.
Learn more about the actual home improvement projects that will be worth a homeowner’s time and money when it comes time to sell a home.
When Did Attic Insulation Get Hot?
Surprisingly enough, more homebuyers are interested in energy-efficient homes and by simply adding attic insulation, a homeowner can recoup 116.9 percent of their costs. This is one renovation that actually pays a homeowner back more than they laid out when they go to sell.
How About Attractive Stone Veneer?
Manufactured stone veneer ends up being the next best-paying renovation, according to the report. Homeowners can expect a return of 92.9 percent. This attraction exterior option often adds to the curb appeal of a home and can make it easier for sellers to grab initial interest in a competitive market.
Other Home Remodeling Projects that Give Good ROI
Think entry points. According to the report, garage doors, steel entry doors and upscale garage doors almost paid for themselves, with a ROI of 91.5 percent, 91.1 percent and 90.1 percent respectively. It looks like buyers want appealing and secure ways to enter a home and safeguard their family and valuables.
These rather small and inexpensive updates are worthwhile for the average seller.
Take Care of Basic Home Maintenance
What good is a renovated kitchen when the roof needs repairs? Buyers do not want to make repairs when moving in to a home. Sal Alfano, the editor director at Remodeling magazine, shared:
“Buyers want to take the basic systems for granted. They assume the roof doesn’t leak and the air conditioning and plumbing work. Maintenance can chew up a lot of cash quickly, and people are afraid of that.”
Minor kitchen remodels and roof and window replacements are some projects that have a considerably high ROI upon resale.
Continue to Splurge on Kitchen and Bathroom Remodels
Take a look at comps in the area and consider whether or not it is time to update or renovate a kitchen or bathroom. Alfano stated that:
“They’re always right up there at the top of the list. They’re the big, sexy rooms that new home builders splurge on, so when buyers are shopping around that’s what they want in an existing home, too.”
Consider the Local Market
There are a number of factors that may affect a home’s perceived value. Talk with an agent and review homes on the market and the prices of recently sold homes to determine which projects to take on that would provide a significant ROI.
In some cases you’ll want to fit in with others in the area, and in others you may want to stand out in some regard. Homeowners need to know:
- Their house’s value
- The value of other home’s in the neighborhood
- The state of the local housing market
- How the quality of the project may impact ROI
- When is the best time to sell after making a desirable improvement to see the highest return
In previous studies, sellers often got triple-digit returns in major cities, such as San Francisco, San Diego, Atlanta, Chicago, Minneapolis and Washington, D.C., on a bathroom remodel. The kitchen and bathroom are rooms where owners spend considerable time so an investment here often pays off.
However, a huge remodel here does not make sense when home value does not justify the cost of the project.
Spend Money Wisely
Homeowners who are not selling soon still need to attend to the routine maintenance requirements associated with owning a home. Adding attic insulation will help reduce heating and cooling costs for current owners, making it a benefit for the average owner looking to enjoy a few more years in their current home.
Those looking to sell in the near future should speak with their agent to get additional insights into their local market prior to starting an expensive home improvement project.
About the Author
Tony Gilbert is the owner of The RealFX Group. Tony specializes in real estate, real estate marketing, managing the team, and achieving goals.
Image Source: Pixabay and Tony Gilbert