It is the fundamental question facing anyone who has ever embarked on a home renovation: How likely am I to get the money back when I sell my house? There is no easy answer, because what a buyer might be willing to pay depends on many factors — everything from the choice of project to the materials you use to the value of other homes in your neighborhood. But it is important to have some idea of what your improvements might be worth. If you want to invest more than you can hope to recoup because you love your house and plan to live in it for a long while, that is fine.
The following are few examples from the Remodeling Magazine 2014 Cost vs. Value Report that add value to your house.
Adding a Steel Door
Return on investment: 96.6 percent
Because of their low cost and durability, adding steel entry doors typically offers the highest return on investment of all home improvement projects. A new steel door may not sound like the cool addition to your house, but it is one of the financially savviest. According to Remodeling Magazine’s 2014 Cost V. Value report, homeowners who install a steel door can expect to recoup nearly 97 percent of the cost when the home sells.
Exterior work on a property, from new siding to replacing windows, dominate the list of projects that offer the biggest bang for your buck. They offer the largest return because a potential home sale can be made or broken on the exterior alone, real estate agents say.
It is all about the first impression, no question about that, if it does not look halfway decent, the potential buyers move on to the next house. It creates the impression that if the exterior of the house does not look good, then the interior will not look good also. Obviously that is not always true, but that is what the magazine report suggested.
So does a steel door really make that big of an impression? Not necessarily, but it improves security and offers energy savings through better insulation. That’s the other reason exterior projects also push up the value of a home — they tend to be practical. Unlike adding luxurious finishes to a kitchen that a new owner may not adore, new siding or new windows generally appeal to any buyer.
Although home exterior projects may deliver a greater return on investment than interior remodeling, all of the 35 home improvement projects listed in the survey returned value this year, thanks to rising home prices that exceeded increasing construction costs.
A New Family Room
Return on investment: 71.8 percent
Remodeling Magazine includes a new first-floor family room and a second-floor bedroom with bathroom in this two-story addition, but any addition of square footage will add value.
Remodeling the Bathroom
Return on investment: 74 percent
Remodeling Magazine’s quoted cost includes updating an existing 5-by-7-foot bathroom and replacing all fixtures, including installing a porcelain-on-steel tub with ceramic tile around it, new shower, standard toilet, and new tile floor.
Finishing the Basement
Return on investment: 77.6 percent
Potential homebuyers are most often impressed by finished basement. A 20-by-30-foot entertaining area with wet bar and a bathroom. However, finishing your basement may not necessarily add value in an appraiser’s eyes, as an appraiser typically counts living space above grade only; however, the buyers do not have to come up with extra cash to finish the basement and use it.
Return on investment: 79.3 percent
New windows look sharper, insulate a home better, save on energy and, for buyers, avoid the cost and hassle of doing upgrades. Wood is the preferred trim finish, but other replacement window projects also pay off.
Minor Kitchen Remodel
Return on investment: 82.7 percent
As Remodeling Magazine defines it, a minor kitchen remodel consists of replacing cabinet fronts with raised-panel wood doors and drawers, along with new hardware; replacing wall oven and cooktop with energy-efficient models; replacing laminate countertops; installing a mid-priced sink and faucet; and repainting and replacing flooring.
The kitchen is always a good place to invest money, because it is the heart of the home. The potential buyers always spend a lot of time looking at the kitchen and reviewing all the appliances.
Garage door replacement
Return on investment: 83.7 percent
Replacing your garage door is another way to improve the exterior of your home. But while it is typically inexpensive, an upgrade is not necessary unless your garage door is old, beat-up or a particularly visible part of your home.
Attic bedroom conversion
Return on investment: 84.3 percent
Converting an attic to a bedroom, especially when you can also add a bathroom, adds value in the same way as a two-story addition. While it will not add to the square footage of the overall home, it does add another bedroom. That puts a home in another category, allowing sellers to charge more.
Return on investment: 87.4 percent
Only two years ago, wooden decks recouped about 70 percent of their value, having dropped during the recession. But with the economy improving and outdoor spaces becoming more popular, buyers interest is again piqued by a quality wood deck out back. The cost assumes a 16-by-20-foot deck with built-in bench and planter, stairs and railings. A composite deck will also pay off, but not quite as much. A composite deck has an ROI of 74.3 percent.