Tips of the Trade: Home Improvements to Raise the Value of Your Home
Buying a home is one of the best investments you can make. Yet there are many things you can do to keep that investment growing. We’ve outlined the five home improvements you can make to get the best return on your investment and raise the value of your home, according to the 2014 Cost vs. Value Report from Remodeling Magazine.
The Top 5
“Right now, renovations are your strongest bet,” suggests Beverly Orloski, a Mortgage Consultant with PeoplesBank. “The best part about these projects is they aren’t overly ambitious, but rather vanity jobs.”
- Replacing an entry door with a midlevel 20-gauge steel door is an inexpensive upgrade at $1,183 on average, but it pays back a whopping 109%, greatly improving curb appeal and earning you extra money. It’s the most cost-effective thing you can do to your home.
- Adding a wooden deck greatly improves your outdoor space and makes your property more attractive and easier to sell. Plus, they basically pay for themselves, returning, on average, 101% of the $10,116 average cost.
- Replacing exterior siding with new vinyl siding pays back nearly 93%, on average, of the $11,903 average cost.
- A midrange attic bedroom remodel involves popping out a dormer for a 5-foot by 7-foot bathroom with shower, insulating and finishing the walls and ceiling, adding four windows, extending the heating and air conditioning, and improving wiring and lighting. The payback is 87% on the $51,621 expenditure. “Creating more living space is one of the best ways to raise a home’s value, and an attic remodel is the cheapest way to do it,” said Orloski.
- A midrange minor kitchen remodel pays back 87% of the $19,544 average investment. Include new countertops, a new sink, faucets and appliances. Then update cabinets with new hardware. The average cost for this is under $20,000.
Things To Consider
Of course, before you rush out to start a job, you should think it through. Here are five things to consider before doing any renovations, even small ones.
Assess whether the project pays: “Homebuyers look at kitchens/baths first, and they’re more likely to pay for themselves,” said Orloski. “For example, a remodeled kitchen or bathroom will pay back 87% and 74% of their respective costs. However, swimming pools hardly ever return their costs and can often be a big obstacle when it comes to selling your home.”
Choose styles that last. “It’s important to keep design renovations in harmony with the home’s original design,” said Orloski. “People want to pay for a cohesive look, not necessarily your funky taste.” Also, aim for classic/neutral colors and styles when choosing cabinets, countertops, and flooring.
Don’t exceed your neighborhood’s ceiling. Your improvements should be in line with the value of your home, especially if you’re already on the high end for your area.
Take into account where you live. Labor costs swing dramatically by region, and local factors like weather and median income influence demand.
Always pay attention to the market. “If housing is in demand, buyers may be willing to pay more for your improvements,” said Orloski. “But be careful not to over-renovate—you’re not likely to get your return if you put a $90K kitchen in a $450K house.”
“Finally, just do your research,” said Orloski. “See which projects are best for you and talk to contractors as well as home financing specialists to figure out the most cost-effective way to get them done.”