Everyone knows that making improvements to your home can increase its value. Real estate professionals in any market will tell you that if you put a little sweat equity and some money into your home, it can result in some real equity down the line.
If you watch any of the 1 million home renovation programs available on TV nowadays, you’ll see people from all over making all sorts of improvements to their homes. They focus on bathrooms, bedrooms, landscaping and everything in between as they prepare their home for sale.
Looking at all these people accomplish — and how much money they have at their disposal — it might seem overwhelming and impossible to accomplish, especially if you have a budget. So, what are you to do if you aren’t a millionaire with unlimited home renovation funds? Focus on the right projects, the ones that result in the biggest bang.
But what are the “right projects?” According to a report from Remodeling.net, the renovation projects that bring the biggest return are not the ones you might think.
The report outlined the top renovation projects based on average cost in 136 markets in the U.S. Of course, if your home is more valuable – as in, it may sell for north of $500,000 – you may want to adjust some of these suggestions below to use higher-end materials.
Here are the top 5 renovations that increase your home value the most, while being able to recoup their cost at sale – according to the 2019 Cost Vs Value Report.
1. Garage Door Replacement
Yep, installing a new garage door is #1 on the list of home renovation projects that return the most value to the homeowner. In fact, 97.5% of the cost of installing a new garage door will be recouped at the time of sale.
Like other exterior features (more on those in a bit), the garage door is one of the first impressions people get of your home. In terms of pure function, you don’t need a sexy garage door; you just need one that opens and closes easily and that secures your home. But if you want a nice ROI, choose a garage door that’s visually appealing to today’s buyers.
You shouldn’t stop at the outside, though. After all, it’s ultimately what’s inside behind the shiny wrapping that counts. When people open that nice new garage door, they don’t want to be “welcomed” by a room full of junk.
Even though the Cost Vs Value Report doesn’t mention garage organization, making sure your inside is as beautiful as your outside is important in any home renovation project. It doesn’t have to be expensive, either.
If you install a pegboard, you can organize all your tools neatly with tool holders and pegboard shelves, and show potential buyers of your home just how simple and clean it can be. Of course, you don’t need a custom pegboard or other equipment, but it certainly helps make garage organization easier.
2. Manufactured Stone Veneer
Once again, people like pretty packages. The “wrapping paper” matters. It’s a theme that you’re going to see repeated in this top 5 list.
Manufactured stone veneer is a great way to boost your home’s curb appeal, and curb appeal matters a lot. Installing manufactured stone veneer results on average with a 94.9% return in re-sale value.
There are a number of places where manufactured stone veneer can be incorporated into multiple places on your home’s exterior. It can be wrap columns of an awning that cover the front door. It can be wrapped around the bottom half of your home, with siding covering the top half. It can even frame your garage door to make it stand out even more. While this may not seem like the most obvious home renovation project for you to take on, it’s one that is almost guaranteed to return you the full cost you put into it.
3. Minor Kitchen Remodel
Finally, we get to enter the front door. I guess what’s inside does count after all! Kitchens sell homes. That much most people know. Upgrading this room can be very expensive, though, which is why it’s important to note the word “minor” in the title of this home renovation project.
The Cost Vs Value Report defines a minor kitchen remodel as one that costs $22,507 on average. That may seem like a lot of money, but in terms of kitchens, it’s really not. It can be very easy to see a kitchen remodel project exceed $50,000, even in a mid-sized home. And while you may be excited to update every last feature of your kitchen with premium products to attract the best buyers, doing so won’t give you the return you’re looking for.
According to the report, these minor kitchen remodel projects return 80.5% of the cost to the homeowner. But what would be termed minor upgrades? Some ideas would be re-facing your cabinets and drawers, installing a new wall oven and cooktop, putting in new fixtures and a new sink, and installing affordable yet durable countertops (maybe laminate) and flooring (maybe luxury vinyl).
Lighting can also have a huge impact. Installing recessed lighting and light under cabinets can result in a huge return on your investment. Plus, neither project is particularly costly or difficult to do.
4. Wood Deck Addition
Quickly, we go right back outside with #4. People love to spend time outdoors, and they love to entertain outdoors. That’s why a nice deck can go a long way in improving the value of a home.
While composite decking is getting a lot of attention today for its similar appearance to wood, its durability and its lower overall maintenance, wood decking is what brings the best return on investment to homeowners. A wood deck addition or replacement may cost roughly $13,333 to complete, but it’ll return approximately $10,083 at the time of sale, or a 75.6% cost recouped rate.
There is just something about the look and feel of a wood deck that is attractive to homebuyers. Whether it’s the fact that the material is natural and blends in with the surrounding environment, or the fact that it’s an original, home buyers value wood decking more than composite materials.
If you’re going to add or replace a wood deck, make sure that you style it in an attractive way to show potential buyers what they could do with the space. Adding a table and chairs, a simple outdoor rug and some plants can go a long way to make the space seem even more inviting.
5. Siding Replacement
Rounding out the top 5 list is yet another outdoor improvement – replacing the siding of your home. Once again, it seems that improving curb appeal is one of the most impactful ways to increase the value of your home.
On average, a siding replacement project may cost $16,036, but will return $12,119 in value at the time of re-sale, giving it a cost recouped rate of 75.6%.
New siding instantly gives your home a literal and figurative facelift. Not only will it make your home glisten, shine and stand out from the others on the block, but it will re-assure buyers that your home is well protected. The great thing about siding is that you will have a ton of choices in terms of material, color and style. You can go with everything from vinyl siding with a traditional color hung horizontally, to natural wood siding hung vertically and stained to match a woody surrounding.
When you are investigating your siding choices, make sure to do your research into what products are best for your region. Certain siding materials perform better in certain climates, for example, while others do not. Paying attention to this detail will go a long way in returning the maximum value for your investment.
Be Smart About Your Home Renovation Projects
Almost all home improvements you make will return some value to you when you’re selling your home. But that doesn’t mean that they’re all smart investments.
While you may think that adding additional bedrooms and/or bathrooms or undergoing a complete kitchen gut and high-end renovation are the best ideas, they aren’t the savviest in terms of straight dollars-to-dollars return. In fact, smaller, more cost-conscious home renovation projects can have a greater impact on your bottom line. Even the simple addition of a custom pegboard in your garage can show off the space-saving potential of your property to buyers.
As the 2019 Cost Vs Value Report shows, some of the most impactful improvements you can make are to the exterior of your home. Curb appeal matters greatly. It makes people smile as they pull up to their home, and gives them a sense of pride as others driving or walking by stare in awe.
Before undergoing your next home renovation project, keep these in mind as they will increase the value of your home the most.
1 Comment
Wow, it stood out to me when you explained installing a new garage door is number one when it comes to projects that return the most value. It seems like garage doors provide a lot of value since they are something that people see the most on the front of a home. Having an attractive garage door makes sense because you want to create a good first impression.