I am often asked by clients and friends what home improvements pay off? Each year Remodeling Magazine puts out a report on Cost vs. Value, average returns homeowners see when they upgrade and what they’d see as a return if they sold. They further break it down into regions.
It is important to know that there are givens that must be done, those that a person buying a home would expect. Knowing the roof doesn’t leak, the plumbing and the furnace work are paramount. Taking care of these items can eat up cash quickly, but without it, you’ll likely be sitting on selling your home and delaying moving onto the next.
As you might already guess, kitchen and bath remodels continue to be the best investment you can make. However, the extent of the remodel varies on the rate of return. An upscale major kitchen remodel will return about 20% less than a minor average kitchen remodel. Replacing windows and entry and garage doors result in significant returns, while additions of master bedroom suites, decks and patios and a backup power generator all yield returns of only about one-half the investment. A swimming pool in Alaska or a climate that has harsh winters is not smart; unless of course you love to swim and it’s important to your happiness.
Here are a few of the top improvements, average costs and what you can expect to recoup:
1. Attic insulation $1343 will return 108% of your money
2. Basement Remodel $71115, 70%
3. Entry Door (steel) $1413, 91%
4. Entry Door (fiberglass) $3304, 85%
5. Bath Addition $43,232, 54%
While you want to think smart about spending, I always tell clients that if they are planning on keeping the home for a period of more than a few years that the return on surrounding yourself with things that are important to you is considerable. Doesn’t happiness account for a BIG something? To me a home is much more than an investment, it’s about the memories you’ll make; it’s the difference between a house and a home.
Overall a good rule to follow: if you’re looking to get a higher return on improvements, don’t overspend on the upgrades and certainly hire a professional to do the job correctly. Consider choosing something that appeal to the masses. Although tempting to choose something that is unusual as a statement piece, the person buying your home may not share your taste and consider it one more thing they’ll have to change walking in the door of their home purchase.