Whether you plan to sell your house in the next few years or are just looking to increase your home’s market value as an investment, there is a good chance that you have, or will, consider some renovations. But not all renovation investments yield the same results.
Perhaps the most important work you can do on your home, as either a seller or an owner, is maintenance. This is not the stuff reality shows are made of, but fixing or replacing a roof is decidedly a better investment than that sexy kitchen remodel. According to Remodeling Magazine, you are less likely to recoup your investment on a major kitchen or bathroom remodel than you are to get back what you spend on basic home maintenance. Example – siding replacement returned 92.8% of its cost, according to a recent study, and roof and window replacements returned 80% or more at resale.
Buyers don’t want to think about the basic systems of a house. They assume that the roof won’t leak and the plumbing works. Both of which are clearly just as important to the homeowner who is not looking to sell.
Kitchens and bathrooms. This is the stuff of real estate shows. Major renovations are not necessarily a better investment. According to the magazine mentioned above, a major kitchen remodel yields less ROI than a minor ($15,000 range) kitchen remodel (69% and 83% respectively).
Some good options for a lower cost kitchen makeover include all-wood cabinets, commercial, higher-end appliances, stone countertops, and wood or stone flooring. For bathrooms, walk-in showers yield a high return and add square footage to the room. One major consideration is the bathroom to bedroom ratio. If you have a three bedroom house with only one full bath, you would do well to either add a bathroom or turn that half bathroom into a full. If space is limited, showers are a perfectly fine (see above) option to complete the room.
A National Association of Realtors study by Florida State University professors G. Stacy Sirmans and David Macpherson found that adding a bathroom increased the sale price of a home by 8.7 percent, more than twice the rate for adding a bedroom.
Speaking of adding rooms, additions can be a great investment, particularly in an active housing market. Every 1,000 square feet added to a home boosts the sale price by more than 30 percent, according to the 2005 study for the National Association of Realtors. The addition of attic bedrooms, family rooms and sunrooms are solid investments.
For those of you who like lists, the top ten home remodeling projects according to the “2014 Cost vs. Value Study” in the order of largest to smallest ROI are:
- Entry Door Replacement
- Deck Addition (Wood)
- Garage Door Replacement
- Minor Kitchen Remodel
- Window Replacement (Wood)
- Siding Replacement (Vinyl)
- Attic Bedroom
- Window Replacement (Vinyl)
- Basement Remodel
- Kitchen Remodel
If you’re not planning to move in the near future, spend your money remodeling in a way that you’ll most enjoy. You cannot put a price tag on happiness.
Remember to check back next week for tips to improve a home’s curb appeal. If the house isn’t inviting from the street, chances are that amazing remodeling job done on the inside will never be seen.