It doesn’t matter if you’re planning to sell your home or live in it for years to come. You need to consider your return on investment on any home improvement project.
Will a kitchen renovation or new siding add the most value? Where will you get the best value per dollar spent? Before you get started, you need to find out which home improvements pay off.
Which Home Improvements Are The Best Investment?
You don’t have to take your kitchen down to the studs or build an addition to boost the value and appeal of your home.
Remodeling Magazine has national data on cost versus value on common home improvement projects. Here are their top 7 home remodeling projects for the “West North Central” U.S. (including Des Moines, Iowa):
- Manufactured Stone Veneer [Cost recouped: 93.5%]
- Siding Replacement [Cost recouped: 87.4%]
- Entry Door Replacement – Steel [Cost recouped: 82.3%]
- Garage Door Replacement [Cost recouped: 81%]
- Minor Kitchen Remodel [Cost recouped: 78.4%]
- Window Replacement – Vinyl [Cost recouped: 77.1%]
- Wood Deck Addition [Cost recouped: 69.1%]
Curb appeal is that all important first impression of your home. Making your home’s exterior look amazing adds value and represents the pride of ownership.
When you take a look at projects with the best return, the majority of the top home improvements focus on the exterior of your home. New stone veneer, siding, exterior doors, and decks all have a high cost vs. value return. If you have the budget to take on these projects, they will likely pay off, especially if your home needs updating.
But you don’t have to spend thousands of dollars on improving your home’s exterior. When it comes to curb appeal, even small changes can make a big impact.
- Paint your front door (gray and black can be the best)
- Paint your siding (if it needs it)
- Clean up your landscaping (pull weeds and add some color with perennials)
- Add a fresh layer of mulch
- Plant a tree
- Replace outdated lighting (and add lighting)
- Make the front porch/entry inviting by adding seating, color, and/or plants
- Update existing garage doors by painting and/or adding hardware
While many homeowners love the idea of completely remodeling the kitchen, it won’t yield the best return on your investment. Remodeling indicates minor kitchen remodels will give you the most value per dollar spent.
For a minor kitchen remodel, consider the following improvements:
- Replace appliances with updated, energy-efficient models
- Reface existing cabinets and add new pulls
- Replace laminate countertops with stone or quartz countertops
- Add a new backsplash
- Replace lighting
- Install new sink and faucet
- Install new flooring
Pick and choose what fits your budget and needs the most attention in your kitchen. You might be surprised how much difference small improvements make.
Like the kitchen, large-scale bathroom renovations don’t always pay off in the long run. Completely remodeling your bathroom will increase its value, but you get a better return on the smaller improvements.
For a minor bathroom remodel, consider these projects:
- Retile the floor
- Update the shower/tub
- Update or add ceramic tile surround
- Update the vanity/sink
- Ensure toilet is white
- Update faucets
- Update hardware on cabinets/doors
If you’re thinking about adding square footage to your home, think first about your long-term plans. Are you staying or selling? Do you need the extra space? Will the extra space help sell your home? Will the addition provide the value you want?
Additions are tricky, as the cost versus value depends on your home, your neighborhood, and your real estate market.
In small homes, adding square footage adds value to the house and improves its resale potential. That said, home additions are costly and might not pay off. Costhelper.com estimates adding a bathroom can cost $25,000+ and adding other rooms can cost $10,000 or more.
The most cost-effective way to expand your living space is to repurpose or renovate existing space in the home. For instance, converting an office to a bedroom, or a basement to a living room and/or bedroom is a worthwhile way to add the space you want.
Before you start your project…
Do you have maintenance and repairs that need to be done?
If the answer is yes, resolve those issues before spending the time and money on a home improvement project.
It doesn’t make sense to spend a ton of money on home improvements when there are more pressing issues. If you have a wet basement, it needs to be addressed before you spend thousands on a kitchen remodel.
The money spent making repairs and maintaining your home is always worth it. Not only does it preserve the value of your home, but it prevents even more costly issues later on.
Are you staying or going?
Are you planning to sell your home soon or live in it for years to come?
If you’re planning to sell it, spend your money on projects that boost the resale of your home. Will you be able to recoup the money spent on improvements? Are your colors neutral so they appeal to all buyers? Which improvements will improve your resale the most? Are the finishes appropriate for your home and your neighborhood?
If you plan to live in your home for many more years, think about which projects provide you with the most value. If you don’t watch much television, it doesn’t make sense to add a new home theater. But if you love to cook and spend a ton of your time in the kitchen, it might make sense to update your kitchen.
Does your project make sense for your specific home and neighborhood?
Don’t price yourself out of your neighborhood. If you live in a mid-range neighborhood, it won’t pay off to do upscale home renovations with top-of-the-line finishes.
Think about what is expected of a home like yours and go from there. What is the appropriate level of improvements for a home in your neighborhood? If you aren’t sure, keep tabs on your local real estate market and ask your real estate agent.
Everyone wants to “get what you pay for.” When it comes to which home improvements pay off, there is a lot to consider. But when you consider your plans, your local real estate market, and the costs involved, you’ll be able to make the right decision for you.
Whether you’re selling or buying a home, the process can feel intimidating and overwhelming. But it doesn’t have to. At Coluzzi Real Estate, we answer all your questions and simplify the process. We’re here for you every step of the way. Please don’t hesitate to contact us today!