Home Improvement Projects:
Do They Actually Increase My Home Value?
There are two main reasons that homeowners undertake a home remodeling or renovation project — to increase their home’s value or to increase their home satisfaction. But what is the actual cost recovery on these often extensive and expensive projects? And do the projects that make home buyers and owners happiest also reap the greatest financial reward?
The “2015 Remodeling Impact Project”, the first of its kind, is an examination of expert REALTOR research based on resale values of renovated homes and the amount of joy homeowners experienced after having completed a home improvement project. The study examined resale value and customer satisfaction of 12 interior and 8 exterior projects ranging from minor to highly extensive.
Reap the Highest Financial Return
The study determined that there were five projects that were most cost-efficient to homeowners and home sellers, that is to say, that most increased the resale value of the home. The top improvement was new roofing, with a 105% return on investment and a cost of only about $7,600. Minor interior improvements, such as new hardwood flooring and refinish were also in the top, as were several exterior repairs, such as a new garage door, new vinyl siding, and new vinyl windows.
|New Roofing||Hardwood Refinish||Hardwood Flooring||New Garage Door||New Vinyl Siding|
|Cost to Complete||$7,600||$2,500||$5,500||$2,300||$12,000|
|% Recovered at Resale||105%||100%||91%||87%||$83%|
Reap the Highest Emotional Return
According to the Remodeling Impact Project, the improvement projects that brought homeowners the greatest satisfaction came from the big projects — the full-scale kitchen renovations, added bathrooms, and new master’s suites. In most cases, the “joy” factor of these projects greatly outweighs the costs. However, though these projects might be appealing to both homeowners and home buyers, they don’t necessarily lead to a financial reward; very few of these appealing interior renovations actually recovered their costs at resale.
|Kitchen Renovation||Add New Bathroom||New Master Suite||Kitchen Upgrade||New Vinyl Windows|
|Cost to Complete||$60,000||$50,000||$100,000||$30,000||$15,000|
|% Recovered at Resale||67%||52%||53%||67%||80%|
The Moral of the Story
Before you remodel, consider your motivation. Is this a major undertaking to get that dream kitchen you’ve always wanted — because that cost probably won’t be returned to you on the resale. Or is this a project designed to increase the value of your home when you do sell? If you’re looking to increase your home value, plan carefully!
Metro Detroit Real Estate Services
Considering selling your metro Detroit-area home? Get all the assistance and resources you need to reap the greatest return on your investment! Find the value of your home to list at the most accurate price, get tips on how to best ready your home to show, or contact us directly to work one-on-one with a top area REALTOR!