Seller Tips
Home Remodeling Projects That Offer the Best Return on Investment
Homeowners are always looking for remodeling projects that will not only improve their quality of life while they're enjoying their house but will also provide a big return on investment when it comes time to sell. No project recoups all the money you dump into it, but some come close.
No Increase in Value From Maintenance
First, keep in mind the difference between home improvements and home maintenance. Replacing your old, broken-down furnace does not increase your home's value; it just makes it possible to sell it.
However, installing dual-pane windows to increase heating efficiency does add value because buyers can perceive the benefit they'll receive from that improvement: lower heating fuel costs.
Valuable Exterior Improvements
Every year, Remodeling magazine releases a cost vs. value report that examines remodeling costs and the resulting increase in home value at resale to determine which projects offer the best return on investment. Among 22 home improvement projects in the 2019 report, nine out of 10 of the best-returning jobs nationwide involved the exterior of the home.
The best-performing project was the garage door replacement, which returned an average of 97.5 percent. The average cost was $3,611, and the average gain in home value was $3,520.
In second place was adding a manufactured stone veneer, which had an average cost of $8,907 and an average increase in home value of $8,449, for a return of 94.9 percent.
The only interior remodeling job in the top 10 was the minor kitchen remodel in a midrange home, which returned an average of 80.5 percent after costing $22,507 and increasing value by $18,123.
Paint Colors
The colors you choose to paint your home inside and out can make a difference in its resale value. Painting goes above and beyond routine maintenance; it increases or decreases visual appeal to buyers and so can result in a higher or lower offer.
The Zillow Paint Color Analysis looked at the effect various paint color choices in different locations throughout the house had on the actual sale price of the home when compared to its estimated value.
The analysis drew some surprising conclusions. For instance, a black front door increased the sale price of a typical U.S. home by 2.9 percent, while pinkish taupe was the best color for a living room, increasing the home price by 1.3 percent. A losing color for the kitchen is brick or barn red, which dropped the price of a home by $2,310.
Kitchens and Bathrooms
Many long-time homeowners feel they must refresh their kitchen and bathrooms before selling if they've remained the same for many years. These jobs, though, seem to pay off more in pride for the homeowners while they're still living there than they do in return on value at resale, especially when it comes to expensive homes.
According to the cost vs. value report, a bathroom remodel in a midrange home returned only 67.2 percent on the average investment of $20,420. For an upscale home, the return was even worse: 60.2 percent, based on an average cost of $64,743.
A similar pattern emerged with kitchens: A major kitchen remodel in a midrange home returned 62.1 percent on an average investment of $66,196. A major remodel in an upscale home was the worst of the four projects: Its return on investment was 59.7 percent on average after a typical project cost of $131,510.
Homeowners who want to take on those projects might want to stay in the house for a while to enjoy living in the remodeled rooms before selling.
Original article published by TheBalance.com
Written By: ELIZABETH WEINTRAUB