After a definite slump over the previous decade, the housing market is on a path to recovery. Housing prices are on the rise, and home equity has nearly recovered. Existing home sales are also on an uptrend. All of this is good news if you’re a homeowner thinking of plunging some money into your home with an eye toward resale value down the road.
But not all home renovation projects are equal. In fact, few of them even come close to recouping their costs when it’s time to sell your home. The average home renovation returns just 65 percent at sales time – and that’s if the sale occurs soon after the project is complete.
For most people, home renovations answer a family need – perhaps a finished basement for the kids’ playroom or an upgraded master bath. And these are worthwhile projects if you plan to remain in your home for more than a couple years.
On the other hand, if you’re looking to add value right away, your dream renovation may not be a sleek new kitchen with granite counters and stainless steel appliances or a fabulous inground pool. Projects that boost curb appeal fare far better than improvements inside the home, with very few exceptions.
Take a look at the top five home renovation projects for return on investment (ROI).
1. Install fiberglass insulation in the attic
Average cost: $1,200 to $2,000
Expected Recoup: 107%
There’s nothing exciting about beefing up your attic insulation, but from a purely cost-benefit point of view, this is the best home improvement that you can make. According to the report, you’ll see a 107 percent return on your attic insulation project. Not only that, you’ll see a difference in your home utility bills in the interim.
2. Replace your front door
Average cost: $1,500 to $2,500
Expected Recoup: ~90%
An automatic win when it comes to curb appeal, a new front door will return about 90 percent of its value in sales price. The most popular replacements for 2017 are stately stone veneer models and sensible steel doors. A welcoming and attractive front entrance was a winning feature with potential buyers and real estate professionals alike.
3. Install new vinyl siding
Average cost: $12,000
Expected Recoup: 80-84%
This is probably not the project you want to tackle just before you sell your home unless your existing siding is a real eyesore. That’s because it only returns about 80 to 84 percent at resale, although that is still excellent compared to that major kitchen remodel at just 65 percent. Just be sure to give some thought to your color selection – a nice taupe or beige with dark shutters, for example, disguises dirt and still looks elegant.
4. Upgrade your garage door
Average cost: $2,300 to $3,000
Expected Recoup: ~80%
Another curb appeal home improvement, upgrading your garage door to an attractive wood or carriage-style garage door delivers about 80 percent of its cost when you sell your home. Garage doors with plenty of windows tend to do a little better than those without. Use one of the new remodeling preview apps to get an idea of what different doors will look like before you take the plunge.
5. Switch to hardwood floors
Average cost: $5,000 to $6,000
Expected Recoup: 78-91%
Depending on where you live and the style of your home, upgrading your carpet or laminate floors to hardwood flooring can return between 78 and 91 percent of the cost when you resell your home. Keep in mind that engineered wood products don’t fare nearly as well – so go for the real thing unless you’re not planning to sell right away. Look for a universally appealing finish, and keep in mind that oak is a perennial favorite among homebuyers.
The bottom line
So why aren’t kitchen and bath remodels big winners when it comes to recouping your investment? These tend to be more labor-intensive projects, and simple is better when it comes to ROI. That doesn’t mean you shouldn’t tackle them if your heart is set on glass-fronted cabinets and an eye-catching tile backsplash – especially if you’re staying put for two years or more.
But if your goal is improving your home, boosting resale value and seeing return on your renovation dollars, stick with these five home improvement projects for 2018.
• By Sheila Olson, www.investopedia.com