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Did you know that home improvement projects can pay for themselves by substantially increasing the value of your home? Before you take on the hassle and expense that comes with working on your home, take the time to investigate which makeovers offer a healthy return on your investment.
Return on investment
The return on investment in a remodeling project is the percentage of the total cost of the project that you’re likely to get back when you sell your home. For example, if you spent $100,000 on a kitchen overhaul and your house sold for $70,000 more than similar homes in your neighborhood, the return on investment of the project is seventy percent.
It’s important to note that it’s possible to decrease the value of your home through poorly-designed renovations. In general, it may be best to stay away from things like overly stylized features and super deluxe kitchens.
Of course, to reap a significant return on investment, you’ll need to choose a home improvement project that buyers want. A little advance research into the potential payoff of a home improvement project is a terrific way to help make sure you put your money into a makeover that comes with a decent financial return. Check out Remodeling magazine's helpful information regarding the average nationwide return on investment for a variety of home improvement projects every year.
Plan your project for a big payoff
Home improvement projects are not equal in the ability to raise the value of your home. Did you know, for instance, that your location matters in determining how much of a payoff you’ll gain from a home makeover? Indeed, many factors are contributing to the return on investment that you’re likely to experience with a specific project. Let’s explore some primary questions to consider before you start your project:
- Is your proposed home improvement typical of other houses in your area? You’ll see a benefit when you upgrade a feature in your home that is common in your neighborhood. A second bathroom, for example, is a fantastic improvement to make if similar homes in your area have second bathrooms.
- Is the cost of the project in line with the neighborhood? It’s a smart idea to keep your level of home upgrades similar to those found in nearby homes. You’re highly unlikely to get a big payoff by installing a $60,000 master bathroom retreat into your home if $30,000 bathrooms are the norm on your block.
Now that you know why it’s important to think about the potential financial boost that you might receive from improving your home, let’s take a look at five home improvements that pay off.
Cost-effective home improvements
Investing in a home renovation project takes (1) money, (2) time, and (3) plenty of patience. Disregard almost everything you think you’ve learned from the home improvement shows currently dominating the cable television channels. Experts say that while this type of television entertainment does open you up to the possibilities that come with a renovation, they tend to dramatically underestimate the time and money needed to complete the job successfully.
Since even the smallest home repair deserves attention, here are five home improvement projects that carry a big payoff, particularly in the Midwest.
#1: Garage door replacement. Does your garage door show the effects of many cold and snowy winters? Consider changing it out with a brand new one that will add visual impact to the exterior of your home, along with the improved performance that is so vital during the stormy days that frequent the area. What’s more, you stand to benefit from around an 82.4% return on your investment.
#2: Manufactured stone veneer. Adding a manufactured stone veneer to your home can add to that all-important curb appeal that real estate agents agree helps to sell a house. You’ll recoup around 82.8% of the cost of installing a stone veneer. Read here for more information on manufactured stone veneers.
#3: Deck addition. Can you imagine how wonderful it would be to entertain your family and friends on a gorgeous backyard deck? Homebuyers in the Midwest relish backyard decks, and you can get back as much as 72.3% of the cost of putting in a wooden deck.
#4: Siding replacement. When it comes to getting a significant return on your renovation dollar, it does seem that exterior improvements reign supreme. Does the old siding on your house evoke memories of trendy colors of long ago? If so, you can confidently replace the siding with the knowledge that you’re apt to recover 72.1% of the total cost if you sell within a few years.
#5: Entry door replacement. A front door welcomes people into your home, and it’s well worth the cost of replacing a worn front door with a new steel one. With an average price of under $2,000, you’ll reap a return on your investment of approximately 70.9%.
Your home is your retreat from the stress of your day-to-day world, and it’s where you treasure time spent with family and friends. You can make your home meet your needs even more by investing in a home improvement project. Even better, by learning about home improvements that pay off in your neighborhood, you stand to increase the value of your home substantially.
Contents of this blog article are intended to provide you with a general understanding of the subject matter. However, it is not intended to provide legal, accounting, or other professional advice and should not be relied on as such. Information may have changed since the publication date.