Are you considering diving into some home renovation projects to prep your home for sale? Before you pick up a hammer – or hire a contractor – let’s talk about value. No, not the value of the remodeling materials.
What’s important is the value your renovation project will add to your home.
Most people want to know which home improvement projects practically pay for themselves, resulting in a higher resale value for their homes. Picking the wrong project could mean sinking a lot of money into a renovation that doesn’t add a penny to your resale value.
In reality, most home remodeling projects fall between a lot of added value and no added value.
Let’s dive into which projects bring the best return by increasing your homes’ resale value. We’ve also included a few other low-cost/high-impact projects you can tackle.
What Renovation Projects Add The Most Value?
Before you jump into action and start throwing granite all over the kitchen, creating a luxury master suite, or turning the backyard into a staycation paradise – find out if it’s worth it. Your goal is to move the value needle in the right direction – up.
The first important point: the best home improvement projects can vary by region. For example, what adds value in Alaska won’t work in Florida. On the other hand, there are some universal recommendations.
Renovations magazine creates a Cost vs. Value chart annually listing the top-recommended home renovations. Check out the 2022 Remodel Cost vs. Value chart for the United States. You can also filter down by region.
Out of the top 10 renovations, only one involves the home interior – a minor kitchen remodel (emphasis on Minor.) This is #3 on the list, with a national average cost of $28,279, returning 71.2%.
The rest of the top ten on the list focus on creating a great first impression by polishing up the exterior of your home. Two of the top ten projects, installing vinyl or wood replacement windows, could also improve the home’s energy efficiency, which buyers look for today.
The list shows a slightly higher return on your investment for installing new vinyl windows – a 67.2% return. Installing new wood windows brings a lower return of 66.3%.
The top spot on Renovation Magazine’s list is replacing the garage door, returning 93.3% of the cost. Number two is upgrading the siding with manufactured stone veneer, with a 91.4% return.
The complete list of top ten renovations for increasing the value of your home is as follows:
- Garage Door Replacement
- Manufactured Stone Veneer
- Minor Kitchen Remodel
- Siding Replacement | Fiber-Cement
- Window Replacement | Vinyl
- Siding Replacement | Vinyl
- Window Replacement | Wood
- Deck Addition | Wood
- Entry Door Replacement | Steel
10. Deck Addition | Composite
Are you surprised by this list? Other than the minor kitchen remodel – these are different from the projects most believe will increase their home’s resale value.
Way down the list, numbers 13 and 18, is a bathroom remodel (58.9%) and a master suite addition (53.4%.) I hear my clients talk about both of these projects the most. Yet, they only return a little more than half the money invested.
What Works Today
Looking back at the Cost vs. Value data from twenty years ago, what topped the list was quite different. In 2002, adding a bathroom or a second story brought homeowners a 94% return. And eight of the top ten projects involved the interior of the home.
But, by 2008-2009, interior remodeling dropped way down on the list of good returns. Curb appeal and energy efficiency projects began to be a higher return value for homeowners.
What works today is making the most of the remodeling money you have to work with by focusing on your home’s exterior. When attracting buyers, “you never get a second chance at a first impression.”
Low-Cost/High-Impact Home Renovation Projects
Before selling your house, low-cost sprucing up can help attract buyers. While these projects aren’t cost-free, you don’t need to spend much to get maximum impact.
Even if you don’t do any remodeling, sellers should focus on cleaning, painting, and planting, which all make a big impression on buyers. So do clean gutters and freshly upgraded mailbox and house numbers.
Instead of completely remodeling your kitchen, you can do the next best thing by painting the cabinets and modernizing the hardware and light fixtures. If you paint the walls, stick to neutral colors – gray, beige, or greige walls and white trim.
Or, look at these recommendations for interior paint colors.
Finally, fix anything visibly cracked or broken in your home, like kitchen or bathroom tiles. Not only does that scream, “the buyer will need to fix this,” but it also makes your home appear worn.
Satisfy any lingering desire to fully renovate your kitchen and bathrooms by upgrading the appliances and adding new plumbing fixtures to the bathrooms.
Recommended Home Renovation Projects
Decide which home improvement projects you’ll do based on the return they’ll likely bring on your investment. Doing what needs to be done to make your home pristine and the best version of itself is currently the most cost-effective remodeling project.
Consider some of the top exterior home improvement projects based on the potential increase in resale value. But choose a project that makes sense, given the condition and location of the home you want to sell.
If you feel like some remodeling is in order, look at your budget and choose what’s important to homebuyers in your area. Remember, every house is different. Your goal should be to pick the project(s) that bring the best value for your investment.
If you’re working with an experienced real estate professional, rely on their guidance to confirm if your planned renovation projects are in demand with buyers and likely to increase your home’s value.
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