Home renovations are a slippery slope when it comes to which areas create the most ROI for home owners. Lucky for you, I’m here to give ya the inside info on 11 home renovations that pay off big time!
Home renovations have offered homeowners an average of 64 percent return on investment (ROI) over the past few years. And existing home prices are still climbing due to an inventory drought.
So that begs the question: is it worth the hassle to renovate for that kind of a return on your investment? If so, which renovations will help your resale value?
Home Renovation #1: Entry Door
Renovations that improve curb appeal tend to produce higher rates of return, and replacing an old or ugly front door is no exception. Opt for the steel variety and don’t be afraid to go for a modern or faux wood look as long as it flows with your homes’ design. You can count on a 91 percent RIO with this easy improvement.
Home Renovation #2: Attic Insulation
This isn’t the most glamorous improvement, but it’s surprisingly important to buyers. Insulation is a huge hassle and a boring, unglamorous improvement; it’s best that you take care of this for future buyers. After all, you can expect a 108 percent return on your investment.
Home Renovation #3: Stone Veneer
Adding stone veneer to an otherwise boring front exterior is not for the faint of heart. It’s a big job and will likely cost upwards of $8,000. The silver lining is that it will dramatically increase the perceived value of your home, and comes with an ROI of approximately 90 percent.
Home Renovation #4: Minor Kitchen Remodel
Kitchens and bathrooms sell homes, so you’d think they’d be great places to target for a remodel. Kitchen remodels can get out of hand quickly, however.
If you go for it, you’ll want to focus on a remodeling budget around the $20,000 mark. Anything more will create too large a gap between the updated kitchen and the rest of the home that hasn’t been improved, and that’s a slippery slope, my friend.
A minor kitchen remodel could include new appliances, updated counter tops, painting cabinets, replacing hardware, and adding a tile backsplash.
Depending on the size of your kitchen and the materials you select, this could easily approach the $20,000 budget, but there’s good news! You can expect an 80 percent ROI for a minor kitchen remodel like this.
Home Renovation #5: Garage Door Replacement
Probably 90 percent of the homes in your neighborhood have a builder-grade garage door. Maybe yours is white or off-white, maybe it has windows or decorative hardware, but it’s still the same door everyone else has.
Replacing it with a faux wood look or something nicer and newer that adds to the curb appeal of your home will get you a 77 percent rate of return. You can count on two things when going this route: you’ll spend at least $1,700 on a worthwhile option, and your neighbors will be jealous.
Home Renovation #6: Siding Replacement
Possibly one of the most drastic ways you can improve your home is to replace siding. If you’ve got steel or vinyl siding, it’s a full tear-out and replacement renovation, costing at least $15,000.
If you’ve got wood or LP Smart siding that’s in great shape, choose an attractive color and have it repainted. The good news is this facelift will earn you roughly a 77 percent return on your investment.
Home Renovation #7: Deck Addition
Adding living space to your home is always a good idea. Adding outdoor space is a harder decision in an area with four distinct seasons, though. Regardless, adding a wood deck will give you around a 72 percent rate of return on your investment.
I’d say this is mostly in regards to two-story homes that lack backyard access from the main level. Adding a deck to this type of home will add to the livability of the house and therefore increase the perceived value in the eyes of potential buyers.
Home Renovation #8: Basement Remodel
The average basement remodel can vary greatly in cost. If your basement is unfinished, you’re looking at $40,000 or more. If it’s finished and needs a full overhaul, the budget could exceed $70,000.
The return on this type of home renovation is around 70 percent so it’s important to take into consideration how much the new and improved square footage will help your resale value.
This will be a question for your real estate agent, as this hinges on location and home values in your neighborhood.
Home Renovation #9: Roof Replacement
Some home renovations are not so fun and quite costly to do but are a necessary evil. An example, if your current roof isn’t up to par you’ll want to tackle this one sooner than later. More than appearance, the ability for your roof to do its job and keep your home protected is highly important to prospective buyers.
Count on a much higher resale value after opting in on this improvement: 69 percent, to be exact.
Home Renovation #10: Bathroom Remodel
If you just cringed a little when you read the words “bathroom remodel,” you are not alone. This kind of home renovation is daunting, messy, and expensive.
On average, you’ll likely spend $18,000 or more to improve an outdated bathroom while getting roughly 65 percent of your investment back.
The choice to remodel an outdated bathroom should be made only after you’ve evaluated whether an update will be cohesive with the rest of your home and if your real estate agent believes the home values in your neighborhood can support such an improvement.
Sometimes you just can’t get that kind of return on investment back, depending on your neighborhood. Do your homework on this one before pulling the trigger.
Home Renovation #11: Backyard Patio
We’ve talked a lot about curb appeal and adding living space to your home, but I’ve saved the biggest for last. Adding to or improving outdoor landscaping is no joke.
Expect to spend between $20,000 and $50,000 on this project. First off, hire a professional. Second, if your home is in a high-end price range, springing for a designer is important.
And lastly, only do this if your current situation is completely unacceptable, as this very costly project yields a scant 54 percent return on your investment, and it will be covered in snow at least four months out of the year.
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