When granite countertops or shiny stainless steel appliances beckon homeowners from the display areas of home improvement stores, it’s tempting to gear remodeling thoughts toward the items that will add flair and decorative appeal to a home. Even though most improvements add some measure of value, deciding which are the best investments can be difficult.
Return on investment, often referred to as “ROI,” varies depending on the project. Frequently, the projects that seem like the best investments don’t bring the greatest rate of return, while those that seem like smaller projects bring substantial returns. Real estate professionals routinely weigh in with their expert advice, and homeowners can couple that advice with Remodeling magazine’s annual “Cost vs. Value Index” to reap the greatest financial impact from their renovations.
The following were some of the projects that garnered the greatest ROI in 2015:
- Open the door to improvement. Region by region across the United States, installation of a new steel door on the front of a home can have a large impact on the resale value of a property. The ROI ranges from 123% at the highest, to 86% at the lowest — which is still a considerable investment return for such a simple project. Match the door’s style with the style of the house for the best value.
- Turn up the kitchen heat. An attractive kitchen can encourage buyers to overlook some of a home’s less attractive components. In the kitchen, replacement countertops, wall color changes, and new cabinetry and flooring offer the biggest ROI.
- Dreaming of a new bedroom. Remodeling magazine also points to creating an attic bedroom to increase home value. The ROI of an attic remodel that adheres to code can garner an 83% ROI.
- Home maintenance projects. There’s little good to improving the aesthetic appeal and functionality of a home if there are existing structural or maintenance issues, warn experts. Siding replacement, HVAC system repair or replacement, a new roof, and basement dampness prevention solutions can be smarter investments before flashy remodels. Many buyers have a strict budget for a house, and those buyers may be more likely to buy a house with little or no maintenance issues. Such buyers will then upgrade the kitchen or baths themselves, according to Harvard’s Joint Center for Housing Studies.
- Worthy window replacement. Angie’s List, a home services review and referral resource, has found that the average ROI of new windows is 77%. The cost of installation and energy savings tend to offset at around the 10-year point.
If remodeling is on the horizon, homeowners should give strong consideration to ROI before choosing a project.