Which Home Upgrades Pay Off Most at Resale?
It’s human nature to desire to recoup the money you invest in your home. Who wouldn’t? But is every home improvement going to be rewarded at resale? Probably not. But that’s okay. There are a few factors you should consider before making a home upgrade, which are the most likely to pay off when you decide to sell. Even if that is your main focus—many different opinions exist about which projects offer the biggest payoff.
The first thing to consider is your plan. Are you staying in your home long-term? Or, do you plan to sell within in the next 5 years? Are you making the improvement for your enjoyment? Or, to improve the home for resale? Looking at your budget is wise, too. Can you afford a mid-range project or something more extravagant? Answering these questions help with initial upgrade choices.
Understanding your motivation and your money situation is beneficial. HGTV claims assessing the money you recoup also depends on the value of your house, the value of houses in your immediate neighborhood, the housing market where you live, how soon you sell after making improvements, and the quality of the project itself.
Prioritize Good Bones
When homeowners think upgrades, they normally think of the fancy type first—like a remodeled master bathroom or a stunning new deck. But choosing desirable projects while ignoring essential projects is not wise. No matter how beautiful your bathroom is, future homebuyers are more interested in a sound structure, which includes a healthy roof, solid siding and functional windows.
Exterior Updates
How can you expect to get future homebuyers inside to check out the amazing interior if they are not impressed with your exterior? You simply cannot.
Here’s how to improve your curb appeal:
- Siding Replacement: Low-maintenance, long-lasting fiber-cement siding is attractive to buyers. HGTV claims you will receive a 103.6 percent recoup rate on this update, which is impressive.
- Landscaping Upgrade: Investing in hardy perennials and shady trees—as well as appealing, low-maintenance plants—has HGTV claiming a 100 percent average return on landscaping at resale.
- Entry Improvement: Replacing your run-of-the-mill entry door with a modern, mid-range steel door or upgrading to a modern garage door are inexpensive projects with a big impact.
- Painting: Modernizing your home paint colors—by using paint cards to help with color selection for doors, trim and siding—delivers a whole new look with a fairly affordable price tag.
Energy Efficiency
According to Realtor.com, the upgrade that produced the most return on investment (ROI) in 2017, was installing loose-fill fiberglass installation in the attic. Practical and cost-effective, this upgrade is the only project that regularly pays back more than you invest, with an average 107.7 [percent] ROI.
Window replacement is another energy efficiency upgrade, providing better insulation and delivering an 89.6 percent average return at resale, according to HGTV.
Remodels + Additions
Remodels and additions are perhaps the most rewarding upgrades for homeowners. Who does not desire an up-to-date kitchen or a walk-in shower?
- Remodels: A minor bathroom or kitchen remodel earns back more at resale than a major renovation. HGTV ranks a minor bathroom remodel ($10,500 average) as #1 ROI at 102 percent and a minor kitchen remodel ($15,000) as #3 ROI at 98.5 percent.
- Additions: Bathroom additions, especially for older homes with limited existing bathrooms, ranks top of the list for high-return investments, followed by attic bedrooms, family rooms and sunrooms. Also, the addition of a deck can earn you 90 percent ROI as outdoor living spaces are currently popular.
What to Do?
While it may seem like the choices are endless, it really boils down to who you want the upgrades to benefit. If the upgrades are for your family, choose upgrades your family finds most beneficial for its everyday life. If the upgrades are to maximize home resale value, utilize the recommendations above to make smart choices. So, what’s your next project?
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