Thinking of selling your home? Flipping an investment property? Either way, you’ll have remodeling projects in your future. It’s important to consider which projects will give you the best return on investment and help you recoup your renovation costs when it’s time to sell.
Make sure you’re choosing the right renovation projects for your market. Returns on investments will vary from market to market. What might be a top priority for home buyers in one part of the country may be lower on the list of needs for buyers elsewhere.
Kitchen and bathroom remodels tend to have consistently high returns everywhere, but don’t overlook other home improvement projects that you might not have considered.
Work with an experienced real estate agent who can conduct a comparative market analysis examining similar homes that have sold recently in your area. That will help ensure you’re making the right upgrades for maximum value in your neighborhood.
If you’re planning to invest a significant amount of money into improving your home, it’s important to do your homework and prepare for the financial costs. If you don’t have enough savings to pay for expenses immediately, you could charge it to a credit card for home renovations.
If your house is in very poor condition, it may be too costly to renovate. In that case, it may be better to sell to a company that buys houses for cash. Companies typically pay less than fair market value, but they’ll give you a quick offer and cover most of the closing costs.
Here are renovation projects that provide the greatest bang for your buck:
Replacing a dated or malfunctioning garage door will set you back an average of $3,907. The average added value is $3,663, meaning you’ll recoup about 94% of your costs when the home is sold.
Enhance your home’s curb appeal by replacing all, or a portion of, vinyl siding with a manufactured stone veneer — a natural-looking engineered stone. The average stone veneer installation costs $10,386 and typically adds $9,571 of resale value. You’ll recoup 92% of your investment.
Updating a kitchen will not only boost your day-to-day enjoyment in that room, you’ll likely recoup about 72% of the average $26,214 price tag. A minor kitchen remodel doesn’t necessarily mean gutting the interior, but it might include new countertops, new flooring, refacing existing cabinets, new energy-efficient appliances, updated lighting, and new paint.
If you have the space, consider converting your attic into a home office or extra bedroom. Adding additional rooms without increasing your home’s square footage is a primary way to add value. Attic conversions average about $39,200 and return about $36,700. That’s a 93.5% return on investment.
There’s no need to completely overhaul bathrooms that already have a functioning layout. A minor bathroom remodel typically runs about $10,500 and averages a return of $10,700 — a 102% return on investment. For a minor bathroom remodel, modernize the vanity and light fixtures, replace the shower head with a rain shower, and upgrade to a low-flow toilet.
Outdated windows are an eyesore, and they can adversely affect your home’s energy efficiency. Consider replacing vinyl or wood windows with Energy Star-rated models to update your home’s look and improve its energy efficiency. Vinyl windows average about $19,385 and recoup, on average, about $13,297. Wood windows lend a classic look but tend to be more expensive to replace. Replacing wood windows costs an average of $23,219 and retrieves $15,644 — a 67.4% return on investment.
Many of today’s buyers are interested in enhanced outdoor living. Consider installing a wood deck to your outdoor space if your property can accommodate one. The average cost for a wooden deck is $16,766, and it adds $11,038 in resale value to your home. That’s a 66% return on investment.