When it comes to building a new home, everyone has an opinion on what should be done and how. And there’s always the person who chimes in with the cliché: “You need to spend money to make money.” While the advice does apply to new home upgrades, some home improvements offer a more attractive ROI than others.
Always Look for Upgrades That Boost Your ROI
Depending on the size of your budget, it’s smart to make upgrades with a higher ROI a priority. When looking at your list of to-dos, tackle the projects that will attract future buyers, so you can attain the top price for your listing when it comes time to sell your home.
One study compared the average cost for 29 common construction upgrades in relation to the respective resale value, cost recouped and change in comparison to the previous year. Overall, these 29 remodeling projects paid back just over 64 cents per dollar in resale value, with curb appeal projects garnering a higher ROI than interior work. Furthermore, replacement projects, such as adding new doors and windows, achieved higher ROI than remodels.
Five Projects With the Best ROI
Here are the top five construction upgrades within the midrange cost bracket that deliver the highest ROI:
- Attic Insulation: 107.7 percent ROI — average cost is $1343, average resale value is $1446
If you’re looking to add insulation, it’s important to recognize which works best. Board insulation is generally more efficient than fiberglass if you’re adding more insulation during roof repair.
- Front Door Replacement: 90.7 percent ROI — average cost in steel is $1413, average resale value is $1282
Your front door is not only a visitor’s first impression, but it’s also your home’s first line of defense against cold and hot outer temperatures.
- Kitchen Remodeling: 89.4 percent ROI — average cost is $7851, average resale value is $7019
Low cost, but impressive looking kitchen remodeling ideas include replacing cabinets, countertops, and/or flooring. Bigger ticket ideas include upgrading your appliances to energy-saving models.
- Garage Door Replacement: 80.2 percent ROI — average cost is $20830, average resale value is $16699
A garage door is another entry point that can negatively affect your home heating and cooling costs. If you door is currently malfunctioning, it also puts whatever you store in there in harm’s way.
- Upgraded Landscaping: 76.9 percent ROI — average cost is $1749, average resale value is $1345
Enhanced landscaping and other “curb appeal projects” have risen significantly in popularity, and a little color of hardscaping can make a significant difference to your property’s curb appeal.
Smaller Jobs Are Also Worth the Expense
However, you don’t need to go “all out” to achieve decent ROI. Subtle changes also pay off. Painting, for example, offers buyers a whole new perspective on properties, especially if the colors or style are in fashion. The color for 2017-18 seems to be “greige,” which is a mix of gray and beige. For a contemporary feel, touch up your reception rooms with this color to add more appeal for a few dollars.
However, as stated above, replacements still work better than revamps. For example, if you have broken or old-fashioned doors and windowed — think single panes — go ahead and replace them all. Windows gained a 73 percent ROI, and siding was also a winning project, coming in at 74.6 percent ROI.
Regarding what not to do, the most substantial low-returning project was the replacement of the backup power generator, which only saw a 54 percent ROI. A close second, however, was the backyard patio, gaining a mere 54.9 percent ROI.
Invest in Your Home for Greater Resale Profits
To conclude, it pays — literally — to be strategic about construction upgrades in your home, and doing some brief research will also keep you abreast of what today’s buyers are interested in and happy to pay a bit more for.
Curb appeal remodeling projects are a solid win at the moment, and some good old-fashioned quality insulation is also attractive to anyone looking to reduce their energy consumption — or costs.