Five top 'money-back' upgrades
When it comes to the bottom line, all home remodeling jobs are not created equal.
Before investing in home improvement, take note of the five top cost-effective exterior projects that will return more money when it comes time to sell.
Remodeling magazine's 2016 Cost vs. Value Report compares the average cost of 35 home-improvement projects to the value they return upon resale of a home. Exterior improvement projects are likely to provide higher rates of return than interior remodels, according to the report.
Looking at the national averages for midrange rather than more costly upgrades, exterior projects such as door, window or siding replacement account for seven of the top 10 high-ROI projects, returning more than 78 percent of the initial investment.
If a homeowner's main goal is to attract buyer interest, focusing on simple exterior improvements that cost less money and take less time makes good sense, says Sarah Parsons, a real estate salesperson with Halstead Property in Brooklyn, New York. "The curb appeal of a home creates the first impression for potential homebuyers," Parsons says. "I have seen that exterior renovations not only return money but they also make the house sell quicker."
The best choice a homeowner can make, in terms of first impressions and return on investment: a steel entry door, which ranks first among the projects and returns more 91.9 percent of the investment. A steel door also is a relatively inexpensive upgrade, an estimated $1,335.
Another high-return project: wood decks. At a job cost of $10,471, on average, a midrange deck returns 75 percent of the investment.
"A deck is great option to increase living space at a reasonable cost per square foot," says Steve Murphy, of Add a Deck in Richmond, Virginia. The national average cost for wood deck construction is around $30 to $35 per square foot. Compared with other projects, such as the addition of an attic bedroom, a family room or a bathroom, which can range from $100 to $200 per square foot.
Garage doors are another high-return project, according to the report. A midrange replacement, at $1,652, brings an 91.5 percent return.
Lightweight, low-maintenance and reasonably priced, new vinyl siding can be appealing because it results in a dramatic exterior change while delivering a solid return on investment. At an average national cost of $12,341, vinyl siding replacement returns 73.2 percent.
The cost/return relationship of these home improvements varies by region and city. An improvement that brings a big return in one area might not be worth as much in another.
For example, the addition of a wood deck in the Pacific region or New England can recoup even more than original investment whereas the same project in mid-Atlantic will return much less of the investment.
If creating greater value is your aim, "Do your homework to figure out what features are important in your area," says Sid Davis, a real estate investor and author of "Home Makeovers that Sell: Quick and Easy Ways to Get the Highest Possible Price," (AMACOM, 2006).
Over-improvement is a common mistake. Again, Davis advises opening your eyes and looking around the neighborhood.
"If you go over the average, you will never get the money that you put into," he says.