Have you ever considered a home improvement project? Perhaps you received a sizable tax return or company bonus and are looking to invest in your home.
A home improvement project can be a great investment or it can actually be a waste of money in terms of recouping the costs when you sell.
Certainly, smart home improvements can have a comfort value and this may be fine if you plan to live in the house for a long period of time.
Regardless, you’ll definitely want to make a good decision about home improvement project before embarking on it and that means doing a little bit of research before you begin.
The people at Remodeling Magazine release an annual study that sheds light on the cost versus value of common home improvements. Here are some of the results of their latest study.
Top Smart Home Improvements
The top improvements for 2014 according to cost recoup percentage and national average:
- An entry door replacement tops the list. This quick fix will set you back $1,162 and will provide a resale value of $1,122. That’s 96.6% of your costs recouped.
- A deck addition (wood) is another good improvement. This will cost you around $9,539 and you’ll be able to recoup $8,334 (87.4%) when you sell it.
- An attic bedroom is a more expensive improvement with a cost of $49,438, but it will recoup $41,656 (84.3%) upon resale.
- A garage door replacement can be added for an average cost of $1,534, and you can recoup 83.7% or $1,283 of those costs.
- Finally, a minor kitchen remodel will cost you $18,856 and you’ll be able to recoup 82.7% or $15,585 of the costs.
Other top improvements include wood window replacements (79.3%), vinyl window replacements (78.7%), basement remodel (77.6%), and a composite deck addition (74.3%).
The improvements with the lowest recoup percentage included:
- A home office remodel, which would only recoup 48.9% of your average cost of $28,000.
- A sunroom addition, which would only recoup 51.7% of your average cost of $73,546.
Others poor improvements include bathroom addition (60.1%), garage addition (62.2%), and backup power generator (67.5%).
Surprised by the Findings?
Some of the improvements make a lot of sense because they seem to improve the basic structure and usability of the house. Such examples include, attic bedroom addition, the entry door replacement, garage door replacement, etc. I’m actually surprised to see the deck addition at the top of the list because this seems like a nice to have feature. Nevertheless, decks are a lot of fun and can add a living space when the weather is nice.
As you can see, an office remodel or sunroof additional are certainly nice to have and not essential improvements. Surprisingly though, the bathroom addition doesn’t do well. I suppose it depends on the situation and if the house goes from 1 – 2 bathrooms I would expect it to be more valuable. Going from 2-3 probably doesn’t make a difference.
Small Improvements for a Quick Return
Keep in mind, that in addition to the most common major improvements listed in the study results above, there are several little things you can do to increase the resale value of your home. If you are currently trying to sell your home, consider these improvements: painting, replacing fixtures, landscaping, cleaning or replacing carpets, or replacing the flooring yourself (i.e. installing hardwood flooring). Such improvements, while not changing the core structure, are esthetically pleasing to buyers.
Home Improvement Refinancing Options
Some of the top home improvement projects that yield a high ROI may be out of your immediate budget. Here are some financing options you may want to consider:
- Credit Card– If you have a points based credit card and your project has minimal costs, you could put the charges on your account and pay them off with next month’s paycheck. Or, you could use a % APR card to fund the project for a few months until you can pay for it.
- Personal Loan – A personal loan can be of help if you have a high-interest rate credit card or don’t have enough available credit on your account. You can apply for a personal loan through your bank or with an online personal lender like Avant.
- HELOC – A home equity line of credit works similar to a credit card. You must have enough equity in your home to take out this type of loan. You can borrow against your line of credit and only pay back what you use. Generally speaking, HELOC’s will carry a lower interest rates than personal loans.
Read more ideas to help you sell your home.
Good luck in your home improvement efforts!
What do you think of the survey results? What, in your opinion, brings the best return for your home improvement dollar?
Photo credit: Mark Hunter