10 Home Renovations That Almost Pay for Themselves
We'd like to think that the improvements we make to our homes will result in an increase in resale value. The unfortunate reality is that, according to Remodeling magazine, the average return on projects is really only about 60.6%. (See also: DIY Home Improvement: 10 Free Options for Training and Advice)
Most of the time, you aren't going to increase your home's resale value, dollar for dollar, with any remodeling project. You can make your home more comfortable to live in, and you can boost the resale value a little bit, but you're just not going to get what you put in.
Every year, Remodeling magazine offers a "Cost vs. Value" report. For 2013, the renovations that will earn you the most return (at least in the mid-range cost) are entry doors and deck additions. The worst renovations? Bathroom additions and backup power. OK, let's get to the count down!
10. Major Kitchen Remodel
If you are willing to remodel your kitchen, you can see a fairly decent return. However, a major kitchen remodel is expensive. It will cost you about $53,931 and return about $37,139 in the dollar increase for your home's resale value. This is a recoup of 68.9%.
9. Basement Remodel
A basement remodel is even more expensive than a major kitchen remodel. It costs about $61,303 to remodel a basement. However, you'll see better results, with a $43,095 increase in your home's resale value, for a recoup of 70.3% of the cost.
8. Window Replacement (Vinyl)
The way your windows look can have an impact on the resale value of your home, and replacing your old windows with new vinyl surrounded windows can result in a $6,961 increase in the value of your home. It'll cost you $9,770, though, which amounts to a recoup value of 71.2%.
It might be worth it to check with your locality for information on financing programs. Some cities will finance your window replacement, if you choose energy efficient replacement windows, and do it for a very low rate, or even no rate. Additionally, there is an energy tax credit offered at the federal level for windows replaced through December 31, 2013.
7. Siding Replacement (Vinyl)
Add siding to your home, and you could see an improvement in the resale value. Siding replacement will cost you about $11,192 and return $8,154 in the resale value of your home. This represents a cost recoup of 72.9%.
6. Attic Bedroom
Are you willing to turn your attic into a bedroom? If so, you could see a return of 72.9% in your efforts. It will cost you $47,919 to turn your attic into a comfortable bedroom, and your home's resale value will improve by about $34,916.
However, your attic bedroom could provide you with a better return if you are willing to rent it out. For those who are looking for a way to earn a little extra income each month, you can rent out the attic bedroom to a boarder. That will improve your return, and provide you with a little cash flow to help pay for the cost of the renovation.
5. Window Replacement (Wood)
Vinyl windows can provide you with a solid enough return, but wood window replacement is even better. It costs about $10,708 to replace windows at this rate, and you see an increase in your home's resale value of $7,852. That's means you recoup 73.3% of the cost.
Again, consider tax credits and other programs to help you offset some of the cost of your renovation.
4. Minor Kitchen Remodel
If you don't have the money for a major kitchen remodel, that might be a blessing in disguise. As much as you might want to completely overhaul the kitchen, the reality is that a minor remodel will give you more bang for your buck — at least when it comes time to sell your home.
A minor kitchen remodel will cost about $18,527 and return about $13,977 in an increase to your home's resale value. That means you recoup 75.4% of the cost.
3. Garage Door Replacement
Increase the curb appeal of your home and get a reasonable value for your home improvement dollar with a garage door replacement. You'll pay about $1,496 for a new garage door, but your home's resale value will increase by about $1,132, for a recoup rate of 75.7%.
2. Deck Addition (Wood)
Have you dreamed of having a nice wood deck out back? If that is your dream, this might be the year to make it come true. A nice wood deck provides a decent value for your money. You'll recoup about 77.3% of your $9,327 outlay on a deck, increasing your home's resale value by about $7,213. Plus, you'll have a great place to relax all summer. Just make sure that you maintain the deck so that it still looks nice when the time comes to sell your home.
1. Entry Door Replacement (Steel)
Another way to increase the curb appeal of your home is to replace your front door. This is a fairly cost-efficient measure that can help you recoup 85.6% of your cost. You'll pay about $1,137 and get $974 back in the increased resale value of your home.
Worst Renovations to Make to Your Home
Before you add that sunroom or remodel your home office, think twice about whether or not you want to bear the expense. Some of the worst renovations, in terms of recouping your outlay, include:
- Home Office Remodel: 43.6%
- Sunroom Addition: 46.5%
- Master Suite Addition: 52.1%
- Backup Power Generator: 52.7%
- Bathroom Addition: 54.8%
Of course, there are trade offs when you make these renovations to your home. A bathroom or master suite addition can add dramatically to your comfort, so you might not care that you won't recoup as much of the cost. Additionally, a backup power generator might be worth the $11,410 cost, even though it only adds about $6,014 to your home's resale value. You can't put a price on peace of mind.
Chances are that your home's resale value won't improve dramatically with any renovations you make, especially if you engage in upscale projects. However, you can recoup some of your costs in terms of resale value if you carefully choose which projects you undertake — and consider whether or not the emotional benefits are worth the financial costs.
Have you done any significant home improvement or renovation projects? Did potential return on your investment influence your decision?