Today's post comes to us from our friends at Zillow.
Wondering which improvements will recoup you the most as an investor? Take it away Jennifer Riner!
Not sure what home improvements to pursue?
To recoup the most for your investment, it’s best to appeal to the widest range of buyers without overspending.
It’s important to remember that buyers may prefer different upgrades, and some markets are better for home improvements than others.
For instance, eco-friendly buyers who also understand the long-term cost-effective strategy in solar energy may pay more for solar panels.
For the biggest financial benefit at resale, consider the following home improvements.
Minor kitchen updates
While sprucing up a dated kitchen is recommended, less is more.
According to the book “Zillow Talk: The New Rules of Real Estate,” a minor kitchen remodel recoups 83.1 percent of the initial project cost.
Further, since buyers often prioritize the kitchen, putting in at least some leg (and budget) work adds appeal for the vast majority of the market.
Rather than putting in a chef’s kitchen for tens of thousands of dollars, minor upgrades like painting cabinets and installing new kitchen hardware pieces are more striking than you might assume.
Switching the countertops to granite, marble or quartz makes a massive difference, too, as long as it is one of a few kitchen improvements to keep expenses low.
Swap out your siding if you’re looking to boost curb appeal.
According to Remodeling Magazine’s 2016 cost vs. value report, new siding costs an average of $14,000 and you can expect to make $10,866 back at resale.
If your exterior renovation budget is low, consider vinyl siding. Although the cost recoup is lower (73.2 percent returns), it’s better than a dilapidated façade.
New garage door
While an often overlooked improvement, garage door replacement presents high returns at 91.5 percent cost recoup.
The average cost to replace a garage door is $1,652, so leave a little wiggle room in the budget if you want to wow your market from the outside.
Otherwise, paint and stain can refresh the look of old garage doors at a lower cost.
Putting about $3,000 aside for a new bathroom – considered a mid-range remodel in this area of the home – buys a new toilet, light fixtures and maybe a double sink, depending on how steep the primary pieces run.
Nonetheless, new bathrooms net $1.71 on a home’s value for every $1.00 spent during renovation.
Simply adding fiberglass insulation to an attic offers over 100 percent return on investment. (Editor's Note: WOW! Who knew?!)
With insulation, buyers are more likely to use this as an extended living area or storage space rather than wasted square footage.
The cost to insulate is, on average, $1,200. The recoup cost is $1,482, which is a 116.9 percent return.
If you go ahead and add bedrooms, you might see as much as 84.3 percent of the project back at resale.
Leave a little character behind, such as exposed brick, which is one of many features that increase home values and minimize days on the market.
Homes with listing descriptions mentioning “exposed brick” have 4.9 percent higher home values than expected and sit on the market 36 days less than expected.
Fresh front doors
A brand new or repainted front door gives 96.6 percent of the cost recouped at resale.
The cost to install the front door or add stone veneer to the bottom of the house costs about $7,500, but presents 92.9 percent yield.
A renewed front entrance makes a positive impression on buyers, who might be concerned about a home’s internal state when a home’s feature appears rundown.
Spending too much on improvements may not reap the returns you might imagine, which is why playing it safe is often a better bet.
What are some of the home improvements to skip?
Major kitchen remodels with an average cost of $60,000 only yield $0.50 for every $1 spent.
You might be inclined to install a swimming pool for a touch of luxe, but they run about $30,000 and only bring back $10,000 to $20,000 in home value gains.
Unless you’re installing for your own benefit, or selling in a higher-end warm weather climate, it’s best to spend your home improvement budget where it can really make an impact on future buyers.