If you are thinking of a specific renovation project that will improve the resale value of your home, you will want to determine which one will give you the best return on your investment – meaning pick the projects that will add the most value to your house with the least cost to you.
Upgrades to kitchens and bathrooms are usually fairly reliable for adding to a home’s resale value; others, such as cheap laminate or vinyl tile flooring, whirlpool baths, saunas and indoor hot tubs and expensive built-in sound systems and home theaters, are not worth the cost.
Here are the top 5 improvements that can add the best appeal and value to your home.
1. New front door
Take a good look at your front door. If it has dings and damage, or the door jam, hinges or screen door are beat up, make them look nice. You want your front door to make a great first impression.
2. Install new vinyl windows
Today it is all about energy efficiency and a longer shelf life. Vinyl windows are a better design, more energy efficient, and will last longer than aluminum ones.
3. Install a new roof
This improvement can be a tricky one. Before you decide to go the route of replacing the roof, get a certification from a licensed roofer stating the estimated remaining life. If it is viable for another five to seven years, there is no need to replace the roof. If not, then you will need to decide to either replace it yourself or you may end up negotiating a shared cost between you and the buyer.
4. Upgrade the kitchen
A kitchen upgrade can be reasonably cost-effective if it’s done right. Cabinet facings might do the trick to make the kitchen pop, or a touch up on paint, or maybe a new countertop, or even put in tile or granite.
5. Invest in some simple landscaping
People enjoy open and private space, reasonable to low maintenance, and an established yard plan that’s clean and shows some pride of ownership. Make sure the grass is cut and cleaned up, sidewalks and driveways are swept, flower beds are weeded, etc.
According to Trulia, the 5 most common upgrades with the worst return on investment are:
1. Adding a pool
Pools can be hit-or-miss when it comes to added value. Buyers with small children may be concerned about safety risks, those looking for a low-maintenance yard won’t want to deal with the hassle and upkeep of cleaning a pool, and buyers who are on a tight budget may not have the extra cash to deal with it.
2. Highly custom designs
Unless you plan to stay in your house for many years to come, think twice about renovations that are too personalized. In fact, custom features may wind up costing you come listing time, as many buyers will factor in the money they’ll need to spend to change the house to suit their own tastes.
3. Room conversions
Buyers look to check certain boxes when they tour your home – for example, three bedrooms, two bathrooms, and a garage. Getting rid of these expected spaces, or altering them into something unusual, may harm your resale value. Bedrooms are coveted spaces that can bump your listing up into the next bracket.
4. Incremental square footage gains
Sizable square footage gains such as finishing off your basement so it becomes an additional livable floor can be a boon in buyers’ minds. But tiny, insignificant changes may not give you much of a return on your investment. You may love your new sunroom, but it’s not likely to drastically increase your home’s overall value. Adding square footage in a way that doesn’t flow well with the floor plan can also backfire. Sure, a half bath on the first floor would be useful, but if buyers have to pass through the kitchen to get to it, the half bath loses some of its appeal.
When your upgrades feel overboard for your neighborhood, you risk alienating buyers on two fronts: buyers who are drawn to your neighborhood won’t be able to afford your home; and buyers who can afford a home of your caliber will prefer to be in a higher end area. Being a little nicer than the other houses around you can be a selling point, but being vastly more luxurious is not.
Bottom Line: Pursue home upgrades for your own enjoyment, but don’t trick yourself into believing you will more than recoup the cost of the improvement in the form of a higher listing price when it comes time to sell. Instead, opt for the projects that have the best potential to attract qualified buyers!