As 2020 approaches, you might be looking for a change of scenery. Whether you are deciding on a kitchen remodel or thinking about moving to a new home, you’ll want to think about the return on your investment. Some home improvement projects do not carry the value put in when the time comes to resale.
According to Remodeling’s 2019 Cost vs. Value Report, some improvements will outperform others. Recouped costs on improvements depend on many factors such as type of improvement, the amount spent, and consumer trends.
As of 2019, the home improvement project with the biggest percentage of recouped cost is the replacement of an unscale garage door at 97.50%. With advantages like a warranty and increased curb appeal, an upscale garage door replacement is the top returning improvement for the second year in a row. Additionally, adding a stone veneer showed a 94% recoup in costs. Other outdoor improvements include the addition of a wood deck (at 75.6%) and siding replacement (at 75.6%). According to the 2019 Cost vs. Value report, “Nine out of the top 10 high-return projects are exterior replacement projects.”
Bathroom remodels did not place within the top 10. With high costs and very little return, you’ll want to carefully consider the amount of investment to make in any type of bathroom project. The most costly of these projects seem to be bathroom additions, where space is taken from the existing floorplan to add a bathroom.
The stats on kitchen improvements are mixed. Major remodels on the low end, and minor remodels in the top 10. Generally, the lower return on interior projects comes down to personal taste. Homeowners are willing to spend extra on features that a future home buyer may value as much. Style, color choices, and design factor into how much a homebuyer is willing to pay for a home. A major, midrange kitchen remodel only recoups 62.10% of the cost on average. This report lists the average remodel at $66,196. Ultimately, the buyer will decide how much they “value” the update based on preference, not value.
It is also important to keep in mind that various improvements are subject to regional trends. Along the Gulf coast affected by strong winds from tropical weather, a roof replacement might return on the investment. Value can also be affected by the real estate market in your area. If you are in a hot market, specific improvements (particularly exterior) can help your home’s value rise.
The report goes on to say, “In order to make the best use of the Cost vs. Value tool, a remodeler has to think like a real estate broker.” Reinforcing the fact that a remodel for resale is something homeowners need to talk to their realtor about before they begin.
With market trends, sold data, and neighborhood information, your agent will be able to help guide you with improvements you should make to get the most for your home.