The Best Home Improvements With A High Return On Your Investment
When planning home improvements, knowing your potential for return on the investment can often inform your decision.
This is especially true if you plan to sell within the next 5-10 years, as certain improvements can show to pay off in a big way.
As a savvy homeowner, you want numbers, as those educate your final decision about which projects to spend on and where you can save.
In order to assess which home improvements will have the highest ROI, we did a little searching online to find the best resources that were based on ROI statistics of real projects.
Our search paid off, and the following list is based on the national numbers for various home remodeling projects according to the Remodeling 2020 Cost vs. Value Report (www.costvsvalue.com).
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What Does ROI Stand For When Talking About Home Improvements?
As you may already know, ROI stands for return on investment.
It is typically shown as a percentage and is calculated by taking the return on the improvement (or amount made back when the property is sold) and divided by the cost of making that improvement.
The higher the percentage, the better the ROI of the given home improvement.
An example would be replacing a roof with asphalt shingles.
According to the Remodeling 2020 Cost vs. Value Report (www.costvsvalue.com) the national average for the cost to replace a roof with asphalt shingles is $24,700 and the return on that improvement when the home is sold would be $16,287.
Using those numbers to calculate ROI, you would divide $16,287 by $24,700, for an ROI of 65.9%.*
That means when replacing your roof, you could expect an average of that percentage back when selling the home in the immediate future.
*© 2020 Hanley Wood, LLC. Complete data from the Remodeling 2019 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.)
Choosing Home Improvements That Retain Their Value -
It is good to remember that the ROI doesn’t apply at the same value for all of time.
What that means is that updated windows in a home in 1999 would not be expected to bring the same ROI when selling in 2020 as it would have if the home was sold in 2000.
Considering the amount of time you plan to live in a home can help to educate your decisions on which projects you take on.
If you’re planning to sell in the near future, say in the next 5 years, it can be wise to consider choosing more classic and neutral styles for permanent improvements to the home.
On the other hand, if you’re planning to live in the home for 10 years or longer, choosing things that you love, even if they are trendy, can be a great choice. Although you may have to make some updates to the trendy items (that will likely be dated by the time you do sell), the investment you’re making is in the immediate enjoyment of your space.
In addition, the life of the materials you choose can make a difference in how much value the improvement will retain.
For instance, choosing something like cement board siding, which has an average 50 year life expectancy, means it can continue to retain more of it’s value for longer than if you were to use a wood siding, which has an average 10 year life expectancy.
3 Home Improvement Updates With Potential For High ROI
1. Exterior Home Improvements With High ROI:
It’s probably no surprise that many of the projects with the highest return on your investment would be exterior updates. That is because these updates are often not just cosmetic, but also practical and necessary for the safety and overall function of a house.
Garage Door -
A new garage door is a relatively inexpensive way to add a fresh look to your exterior.
There are many styles and designs that won’t break the bank but can have a big impact on updating the style of your home.
Front Door -
Installing a new front door is an easy way to transform your entryway and set the tone for the style of your home.
This is a change that only takes a day or so to complete but is often a marked improvement for the appearance of a home. It is also helpful in keeping a home secure and can impact energy efficiency if replacing an older door.
Siding -
Much of the exterior maintenance items can have a high ROI because they are large and costly projects that are necessary to keep the home’s value by protecting the items inside.
Updates like new vinyl or cement board siding have the potential for a large return on the investment made for the improved function they can offer.
Another smart investment in your exterior is adding decorative stone veneers to give your home a facelift that improves the curb appeal.
Windows -
Replacing windows is a common necessary exterior project that can have large returns.
In general, vinyl windows tend to have a better ROI than wood windows, probably because they are typically lower in price and are lower maintenance - but both can be great options and often need to be replaced anyway as a home ages.
Deck -
Another great way to update your home and have it pay off in more ways than one is by adding a deck.
A new deck adds to the available space for enjoying and entertaining outdoors, essentially extending your living area.
Even a smaller home can feel larger with a functional deck that adds the feeling an outdoor living space.
2. Kitchen Remodel Projects With High ROI:
A kitchen remodel that updates the aesthetics of your home is a project that can pay off in a big way while also offering improvements to the function.
All kitchen remodels have a decent ROI, but the highest return comes from kitchen updates that include cabinet refacing to give the kitchen a new look without the cost of reworking the entire layout.
Cabinet refacing is when cabinet doors and drawer fronts are removed and the cabinet boxes and drawers are left in place. These are then replaced with new doors and drawer fronts, typically in a different style.
At the same time the hinges can also be swapped out for new soft close hinges which is an easy way to extend the life of the cabinets by reducing damage from slamming doors.
The cabinet boxes, new doors and drawer fronts are then painted to give the kitchen a cohesive look and help the new doors blend seamlessly into the existing kitchen layout.
New cabinet hardware is added to bring a fresh style to the doors and drawers with updated knobs and pulls. I can’t emphasize this enough: Hardware is a really important step as it can bring the space to life!
Beyond updating the cabinet doors - the countertop, sink and faucet should also be replaced to provide a full transformation.
New countertops made from quartz or natural stone are a popular choice to give a high-end look with options that won’t break the bank. A solid surface or stone countertop will also allow for an updated undermount kitchen sink, if desired.
Another great sink choice for this type of kitchen remodel is a retrofit farmhouse sink that can be installed over the existing kitchen base cabinet and give the room a new contemporary look.
To complete the kitchen remodel, new appliances should be added. The most desirable appliances are stainless steel, although black stainless is also having it’s moment of popularity.
With so many new appliance package options available, choosing a matching set can be a great way to improve the way you use the kitchen as well as the look of the space as a whole.
3. Bathroom Remodel Projects With High ROI:
Everyone loves a remodeled bathroom!
Redoing a bathroom to create a new look, without going overboard, is a smart project that offers a great return when selling.
Removing the old flooring, tub, toilet, and vanity and then replacing with new finishes can give a tired bathroom a new breath of life.
Bathrooms with both a tub/shower combination are considered “full bathrooms” which are commonly the most desirable when buying and selling a home. This is because full bathrooms have appeal for the widest range of people as it allows the most possible uses for an individual or family.
As long as you’re replacing a tub, it is wise to consider how that space can be best used. Adding a deep soaking tub is a smart way to transform a standard tub into a spa-like experience that allows more depth for bathing within the original tub’s footprint, which means minimal additional cost.
If you want to create a spa-like showering experience with a rain shower head and a hand shower, but don’t have the budget for all those extra plumbing parts and labor, we recommend checking out a Delta In2ition Shower Head.
They are a favorite of our remodel clients and offer double the functionality with a similar price to that of just purchasing a typical rain shower head by itself.
New tile for the tub surround and on the bathroom floor is a high-end look that is also durable and can last a long time when installed properly.
The beauty of tile is that its extremely customizable and allows for so many different possibilities without necessarily increasing the overall cost of installation.
If you’re wondering how to create your own best bathroom tile design, you’ll want to check out our article: Creative Bathtub Tile Ideas And Inspiration.
Another important design decision is selecting an updated vanity as it can do A LOT to change the overall style of a bathroom.
To get the most bang for your buck, choose a vanity that has a good amount of storage inside and a top with a sink included. Even in a small bathroom, narrow or shallow depth vanities are available to maximize the storage and function of your space..
In small bathrooms or bathrooms with limited space, a medicine cabinet can be another useful way to add storage - especially when installed into a wall between studs, as it won’t take up space in the bathroom itself.
New lighting is another important update in a bathroom and can help to ensure it is bright enough to able to see when showering, putting on makeup, and getting ready in general.
Calculating the amount of lumens you would need for your specific size of bathroom can be really helpful to make sure you choose lighting that will be bright enough for how you will be using the space.
Conclusion
When planning improvements, knowing your potential return on the investment can help bring peace of mind. This is especially true when you’re planning to sell in the next few years. Improving the exterior with both curb appeal projects and necessary maintenance items are the best ways to get a top dollar return. Both kitchen cabinet refacing and bathroom remodel projects can be excellent ways to invest in your home and get a good ROI, especially when planned and budgeted appropriately.
Now we want to hear from you - Are you planning any home improvements in the near future? What project do you think your home’s value could benefit from the most? Let us know the in comments below!
