Getting the most from your renovationHome Tool Kit
Making your house a home takes love, time, effort, and sometimes, a great remodeling project. If all goes to plan, the results can be incredible. More space, updated styling, improved functionality…they’re all good reasons to renovate.
An increase in your home’s resale value doesn’t hurt either!
But before you jump into anything, know that your remodeling project might not net you the return on investment (ROI) you expect. For instance, year after year, kitchen and bathroom renovations continue to be the most popular projects. So it might surprise you to learn that statistics show remodeling those rooms doesn’t pack the biggest ROI punch anymore!
That’s not to say updating a kitchen or a bathroom, or adding new rooms can’t do wonders for your home and its resale value. But an annual study conducted by Remodeling Magazine shows that for the money, there are other projects that’ll get you a better ROI*:
Top 5 remodeling projects by ROI (from Remodeling Magazine):
- Replacing the Front Door with a new Steel Door – 96.9%
- Adding a wood Deck – 87.4%
- Replacing older Siding with fiber-cement Siding – 87%
- Building an Attic bedroom – 84.3%
- Replacing old Garage Door with a new Garage Door – 83.7%
*Resale value as a percentage of construction cost.
What do these findings suggest?
It looks like, in today’s market, you’re more likely to get better ROI remodeling home basics than by renovating a bath or kitchen. But why?
Kitchen and bathroom renovations are the most popular, but they can also be the most expensive projects (around 25% of your home’s value for a kitchen and 12-15% for a bathroom, according to Remodeling Magazine). Instead, faster, cheaper renovations like new windows and siding can maintain the existing structure and make your home look great without breaking the bank. They can also help your home sell for more!
Durable, low-maintenance materials are also a plus, since they lower the operational and maintenance costs of your home.
Realities of Remodeling
As telling as this info is, it’s only a national average. So you might not get exactly 87.4% back in a sale after you build a deck. What you do get back on your investment will always depend on the quality of your project, when you sell, and your housing market, region, state, city, or even neighborhood.
What can be said is that the value of remodeling is on the rise. So if you’ve been thinking about it, now might be the time.
Just remember, that (usually) remodeling projects are for you…not the next guy. If you want to remodel (especially if you don’t plan on moving anytime soon), then remodel your way. Don’t worry as much about the ROI, and enjoy your new deck, bathroom, office, kitchen…whatever!
And remember to tell your insurance agent about your remodeling project. Talk to them and make sure your Home insurance limits provide the amount of coverage you want after the renovations or additions.