Which Home Remodeling Projects Are Worth Your Money?
Even if you’re not planning to sell your home anytime soon, it’s an inevitable question when you consider remodeling: How much will this improvement add to the value of my home?
The top-ranking home improvement? A new front door, which on average adds 96.6 percent of the amount you spent to the value to your home. But it has to be the right front door. Keep in mind that sometimes painting the existing front door provides the same payoff.
Replacing old elements, such as doors, windows and siding, in general yielded a better financial return than bigger remodeling projects, such as additions. But real estate agents say updated kitchens and baths still bring a significant payoff, especially at resale time. Kitchen projects yielded a higher return than bath projects, with a minor kitchen remodel adding 82.7 percent of the project’s cost back to the home’s value. Kitchens are important because would-be buyers often overestimate how much they would cost to update.
But the average cost of a minor kitchen remodel – new cabinet doors, appliances, countertops, sink, faucet, paint and hardware – was $18,856 nationwide. Savvy shoppers can do it for less than the buyer assumes.
But, like the front door, it’s important to do the right kitchen remodel. Adding a $75,000 kitchen to a $100,000 house is unlikely to yield $75,000 in value, although it may make you a happy chef. As a general rule, look to spend about 25 percent of the home’s value for a new kitchen and 12 percent to 15 percent for an updated bathroom.
Whether certain improvements will pay off varies not only regionally, but also neighborhood by neighborhood, based on who is going to live in the house. For example, a pool adds more value to homes in some Los Angeles neighborhoods than in others. In places, like Montana, with colder climates, a pool may not add any value.
Renovations within the existing envelope of your home – those that don’t require you to build an addition or expand the roof and foundation – often return more value than building extra rooms onto your home. For one thing, they usually cost less.
Converting an attic into a bedroom returns 84.3 percent of the amount spent. Turning attics into usable space is a popular and profitable improvement in areas where much of the housing is older.
Adding a powder room and then closing off a hall bathroom to make a bedroom suite is popular and it doesn’t require adding to the home. But an addition can pay, especially the right addition.
Replacing windows with French doors that open to the backyard is another popular, and not very expensive, renovation project. It makes the room feel bigger and gives you somewhere to go. Suddenly your home just feels more spacious.
In the years before the real estate market crashed, additions were the most popular remodeling project, with family rooms, kitchens and master suites among the top choices. But in the current lending climate, it’s easier to get a mortgage to buy a bigger house than it is to get a home equity line of credit to add to an existing home.
Among the home improvement projects seen these days, many focus on updating the envelopes of homes with new siding, windows and insulation. For people who plan to stay in their homes, investing in those projects, as well as in more energy-efficient heating and air conditioning systems and appliances, saves money all year.
Resale value is one factor to consider in a remodeling project, but the value to you as an occupant matters as well. This is especially important if you plan to stay in the home for a long time. Remodeling from the perspective of looking at it from an investment strategy is a terrible model. What we can’t quantify is the value of lifestyle.
Here are some the home renovations that will give you the biggest bang for your buck.
- Entry door replacement: 96.6 percent
- Deck addition (wood): 87.4 percent
- Attic bedroom: 84.3 percent
- Garage door replacement: 83.7 percent
- Minor kitchen remodel: 82.7 percent
Phillip Herzer • MPH Custom Builders • Florence, Montana 59833 • 406-544-1411