The Home Improvement Projects that Increase Your Home Value... and the Ones that Don't
Are you considering a home improvement project? Whether it's to prepare your home for re-sale, or simply an upgrade for your own enjoyment, one thing is true -- home improvement projects can be pricey! So it's smart to consider whether the project you have in mind will increase your home value before you make any final decisions.
Some improvements are purely for personal pleasure -- like an outdoor Jacuzzi, or a workshop space with central A/C in your garage -- the kind of upgrades suited to your particular tastes. Other improvements are more practical -- like a new energy-efficient furnace, or replacing old, rotted siding. Some home-owners are surprised to learn, however, that not all "practical" improvements are equal when it comes time to sell. Unfortunately, just because you put $25,000 worth of improvements into your home, it doesn't mean your home is worth $25,000 more to potential buyers.
Exactly how much of your home-improvement dollars you can recoup when you go to sell can vary. Below we've rounded up a list of best-bet home improvement projects, as well as some that rarely make a difference (no matter how much you paid for them) when it comes time to sell your home.
*Important note: The figures contained here are national averages. If you're interested in local estimates, just ask us and we'll be happy to help!
If you're planning to sell your home in a year or two, a fresh coat of a neutral-toned paint could make a big difference for buyers -- who may get turned off by that bright mango kitchen or bubblegum pink bedroom. Interior painting is a fairly easy DIY project and often takes more time than money. But a professional exterior paint job is a different story. Does the outside of your home need a fresh look? A professional exterior paint job can recoup close to 75% of its cost -- plus it increases curb appeal, which can mean greater interest from more buyers as soon as your home hits the market.
With just a few basic improvements, a kitchen upgrade can make a lot of sense. New paint and flooring are big winners with buyers, as is removing outdated wallpaper. Do your cabinets look dated, shabby, or in need of upgrading? Instead of replacing them with new cabinetry, which can be expensive, consider lower-cost alternatives -- like sanding, staining, or painting your existing cabinetry, then upgrading the hardware to make a big difference in appearance (here are a few other ideas, too). According to Remodeling Magazine, the average cost of a major kitchen remodel is about $39,000; however, simply refinishing an outdated kitchen cost an average of $15,000. The full kitchen remodel recouped 80% of its cost, the more moderate remodel recouped 87%.
The more time that goes by after an upgrade, the less value it usually retains for possible buyers. But that rule doesn't always apply to "area conversions" -- or, converting unfinished space to liveable square footage. Generally speaking, increasing the functional space of your home holds its value for a longer period of time than simply remodeling just to make a house look better. In addition, converting existing unfinished space is usually much less expensive than adding an addition to your home.
For example, converting attic space into a bedroom usually costs about $30,000 and returns about 73% of its cost, according to Remodeling Magazine. Turning your basement into extra living space costs an average of $40,000, with a recoup average of about 69%.
It's hard to go wrong with adding an extra bathroom. At an average cost of $14,200, a new full bath can recoup 81% of its total cost!
Compared to other outdoor improvements (with the exception of exterior painting) adding a deck brings an excellent return. New decks cost about $6,000 and generally recoup 75% of their value.
A good set of standard windows may get you about 68% back. If you want to install custom shapes and sizes, though, don't expect to get as much in return. Your utility bill savings may make up for the iffy resale value -- but energy efficiency experts often say it's best to ditch the idea of replacing those original windows and use window quilts or insulated cellular shades, instead. They're much less expensive, retain heat well, and you can usually install them yourself.
In a word -- don't! Unless you're putting it in for you and your family to enjoy, it's commonly agreed that a swimming pool has no resale value at all. They may sound nice, but pools are expensive to install, expensive to maintain, and can turn off a lot of buyers who otherwise may love the rest of your home.
Another improvement to make if it's solely for your own enjoyment. If potential buyers are not horticulturally inclined, chances are your floral handiwork won't add to the offering price. The same can be said for expensive fences and stone walls -- they look nice, but buyers don't pay up for them. (However, basic landscaping, especially along the foundation, does add nicely to curb appeal and can attract buyers.)
Basic Is (Often) Better
It may not sound very exciting, but the basic improvements you make to your home will probably have the greatest impact on its value -- for example, a beautiful new bathroom won't make up for a leaky roof. If you're thinking of selling your house in the next year or so, be sure to address any basic needs your home may have before moving on to the fun, more cosmetic fixes!
Want to learn more? If you're thinking about selling your home within the next year, we can tell you what specific improvements will make the biggest different to your home's potential listing price, and which upgrades to avoid. This is a free, no-strings-attached service, designed to give you a jumpstart on next spring's real estate season. Interested? Just let us know.