By Sheila Olson
After a definite slump over the previous decade, the housing market is on a path to recovery. Housing prices are on the rise, and home equity has nearly recovered. Existing home sales are also on an uptrend. All of this is good news if you're a homeowner thinking of plunging some money into your home with an eye toward resale value down the road.
But not all home renovation projects are equal. In fact, few of them even come close to recouping their costs when it's time to sell your home. The average home renovation returns just 65 percent at sales time – and that's if the sale occurs soon after the project is complete.
For most people, home renovations answer a family need – perhaps a finished basement for the kids' playroom or an upgraded master bath. And these are worthwhile projects if you plan to remain in your home for more than a couple years.
On the other hand, if you're looking to add value right away, your dream renovation may not be a sleek new kitchen with granite counters and stainless steel appliances or a fabulous inground pool. Remodeling Magazine recently released its 2017 Cost vs. Value Report, and once again, projects that boost curb appeal fare far better than improvements inside the home, with very few exceptions.
Average cost: $1,200 to $2,000
Expected Recoup: 107%
There's nothing exciting about beefing up your attic insulation, but from a purely cost-benefit point of view, this is the best home improvement that you can make. According to the report, you'll see a 107 percent return on your attic insulation project. Not only that, you'll see a difference in your home utility bills in the interim.
Average cost: $1,500 to $2,500
Expected Recoup: ~90%
An automatic win when it comes to curb appeal, a new front door will return about 90 percent of its value in sales price. The most popular replacements for 2017 are stately stone veneer models and sensible steel doors. A welcoming and attractive front entrance was a winning feature with potential buyers and real estate professionals alike.
Average cost: $12,000
Expected Recoup: 80-84%
This is probably not the project you want to tackle just before you sell your home unless your existing siding is a real eyesore. That's because it only returns about 80 to 84 percent at resale, although that is still excellent compared to that major kitchen remodel at just 65 percent. Just be sure to give some thought to your color selection – a nice taupe or beige with dark shutters, for example, disguises dirt and still looks elegant.
Average cost: $2,300 to $3,000
Expected Recoup: ~80%
Another curb appeal home improvement, upgrading your garage door to an attractive wood or carriage-style garage door delivers about 80 percent of its cost when you sell your home. Garage doors with plenty of windows tend to do a little better than those without. Use one of the new remodeling preview apps to get an idea of what different doors will look like before you take the plunge.
Average cost: $5,000 to $6,000
Expected Recoup: 78-91%
Depending on where you live and the style of your home, upgrading your carpet or laminate floors to hardwood flooring can return between 78 and 91 percent of the cost when you resell your home. Keep in mind that engineered wood products don't fare nearly as well – so go for the real thing unless you're not planning to sell right away. Look for a universally appealing finish, and keep in mind that oak is a perennial favorite among homebuyers.
So why aren't kitchen and bath remodels big winners when it comes to recouping your investment? These tend to be more labor-intensive projects, and simple is better when it comes to ROI. That doesn't mean you shouldn't tackle them if your heart is set on glass-fronted cabinets and an eye-catching tile backsplash – especially if you're staying put for two years or more.
But if your goal is improving your home, boosting resale value and seeing return on your renovation dollars, stick with these five home improvement projects for 2017.
Putting an exact number on the cost of home renovations is difficult. But there are some basic expenses that tend to go with most jobs. Knowing what to expect can help you decide which renovations are right for you and your budget. Keep reading to learn more about the actual costs of home renovation projects.
According to Home Advisor’s True Cost Guide, homeowners spend about $40,000 to add an additional room or expand their home. Depending on your home and what you're looking for in terms of additional space, costs will range from $7,000 to $100,000. While this sounds like a lot to invest, think about your project. Do you want to recreate a room from scratch or make modest improvements?
Either way, the good news is that adding additional square footage to your home may help increase your resale value, especially if bigger homes are going up around you.
Kitchens are a popular location in many homes. For that reason, kitchen updates are one of the first major renovations that homeowners tackle. On average, homeowners spend about $20,000 on kitchen remodels. High-end jobs can come closer to the $40,000 mark in some cases.
A common kitchen renovation will include:
Should any of these amounts start to scare you, you can always do something less upscale. Painting cabinets, refinishing wood elements or even upgrading an appliance or two could make a lot of difference down the road.
Remodeling or finishing a basement can be a big job. But the added usable square footage is a great addition to any home. On average, homeowners spend about $19,000 to finish their basements. This could be as simple as covering the concrete foundation with flooring and the walls with some drywall. If you want something more usable and comfortable, you might consider additional lighting, furniture and some electronic elements.
Many homeowners remove walls to open up their house. Turning your kitchen and dining room into a joined space is a popular project. You can either knock down the wall altogether or replace it with a movable wall. On average, removing a wall in your home will cost around $300 to $500. Always hire a pro to take down load-bearing walls, textured walls or walls with lead paint. Then, once the wall is no more, make sure to spruce up what’s left so it doesn’t look tacky.
Many homeowners overlook permits when beginning a remodeling job. Permits aren’t a major expense, but they are an important part of the renovation process. On average, homeowners undergoing a renovation will spend about $900 on permits. Some larger cities can command prices closer to $1,500. If you have a general contractor onboard, they will know where and how much permits will cost. There are smaller projects that shouldn’t require permits, but for anything that structurally changes the home, be safe and get one.
Home renovations can be costly, but having a plan before construction begins will help eliminate any additional expenses. You'll also want to keep about five percent of your budgeted cost as an emergency fund. Unexpected repairs can happen down the road, and you are safe with a “rainy day” fund than trying to get a secondary loan. Another way to ensure repairs are less likely is by getting a quality contractor. By interviewing three to four professionals, you can get the best quote and highest quality.