Home Improvements Don’t Just Make a Better Home—They Create an Even Higher Resale Value. to Generate the Most Out of Your Renovations, Consider These Seven Upgrades With the Biggest Roi
Modern kitchen. Spacious closets. A backyard oasis.
Whatever it is a homeowner wants, if their house doesn't already have it, there are two ways to get it. The first, of course, is to purchase a house that checks off every box on their wishlist.
In many cases, that’s easier said than done.
The second option is to upgrade—an alternative that's growing in popularity.
Reports show that first-time homebuyers spend an average of $33,800 on home renovations. For those with more homeownership experience—ages 55 and up—their spending is nearly double that at $60,400.
While home upgrades make a house as comfortable as possible for those living in it, it’s critical to realize that renovations should keep the future in mind. That future being when it comes time to sell.
Sure, you want a house that fits you and your lifestyle, but it also needs to have universal appeal. When it's time to move, you don't want to be stuck waiting on a single buyer, but rather have a marketable home that speaks to a broader audience.
In other words, when you renovate your home, you’ll ensure a healthy return on your investment.
With that in mind, let's take a look at seven home improvements with the biggest ROI.
Manufactured Stone Veneer
For the past half-decade, this relatively minor improvement has consistently ranked near the top of each year's ROI list. It's not difficult to understand why.
Curb appeal matters. Style matters. And right now, the stone look is very much in style.
Concrete-based veneer, which manufacturers can craft into a number of shapes and colours, mimics the look and feel of real stone. Unlike stone, however, it comes with a lot more flexibility in how you can use it. It also lasts longer and doesn't require the high maintenance of stone.
Installation often involves placing the lookalike stone along with the bottom third of a siding on the house. Other variations included creating a stone veneer accent wall or wrapping posts or lining a garage or front porch with the faux look.
Average installation costs are modest compared to other improvements, running around $9,400. That investment, however, can recoup up to $9,000—a 96% return. In some cases, that return pays for the improvement and then some.
Mid- to upper- range homes stand to gain the most from manufactured stone veneers, where the interior shows well, but the exterior is dated or predominantly vinyl siding. This can often mean the difference between two otherwise comparable homes.
Garage Door Replacement
Let's face it, garage doors are a necessary evil. They help secure our second most significant investment or serve as the entryway for a glorified storage shed. What they don't do, however, is fulfill either of these duties with a whole lot of pizzazz.
This is why replacing a drab, flimsy door with a new, upscale four-section door can really make a home pop. The new installation includes heavy-duty steel tracks but makes use of the current motor, keeping the average project cost below $4,000.
New, upscale garage doors are also energy efficient—in the panels and, if present, the windows—which is a great additional selling point.
The total return averages around 96%. Ultimately, what the new garage door really achieves is a more cohesive look for the house, setting it apart from others that still have their same tired old door.
Minor Kitchen Remodel
The primary question you may have is: just how minor is minor?
Of course, if your kitchen is already in decent shape, new, energy-efficient appliances will go a long way—for less than $5,000 in most cases. However, a minor, mid-range kitchen remodel at an average cost of between $20,000 to $25,000 will take the heart of your home to new heights.
This minor remodel includes new cabinet fronts—both door and drawer—and new hardware (while keeping the base cabinetry intact). There's also new countertops, flooring, and a fresh coat of paint for the walls and ceiling. Finally, you'll still want to add those new, energy-efficient appliances.
Other kitchen renovations you might want to consider include a new sink and faucet, or a backsplash if the kitchen doesn’t already have one.
Sure, this seems like a lot, but remember, we're talking mid-range. You're not breaking the bank for high-end counters or flooring or ripping out the cabinet boxes for new ones, which is a massive expense.
Even with modestly-priced materials, you'll see an excellent return of nearly 80% of your outlay.
For comparison, a major, mid-range kitchen remodel runs an average of $68,000 and returns only 59% of the investment upon sale. If you go upscale, the return is 54% at a cost of $135,547.
Notice a trend?
Curb appeal is a significant selling point for homes hitting the market. Whether it's faux stone accents, a new garage door—or windows or a front door, which we’ll cover below—buyers want a house that's comfortable on the inside and looks fabulous on the outside.
On the surface, a full siding replacement seems like a big job. In some cases, that's true, especially if you're updating the exterior of a 5,000 square foot home. Even then, you’ll get a substantial return on the project. Why?
Nothing will give your home that fresh, newly-built look better than replacing its facade.
Both fiber-cement and vinyl siding offer excellent ROIs—77.6% and 74.7%, respectively. And both will serve your house well. Each option is durable, weather-resistant, energy-efficient, and relatively low-maintenance (if you want ultra low-maintenance, go with vinyl).
Those latter considerations matter a lot if you're not quite ready to put your home on the market, but want to enjoy now while investing with an eye to the future.
More so than any other item on this list, window replacement is a good idea regardless of your short, intermediate, or long-term plans to sell your home.
Along with updating your home’s style and appearance—again, curb appeal—new windows significantly lower your energy costs. In some cases, new windows result in savings of up to $450 per year. Not only that, but they also aid in reducing noise pollution and filtering out harmful UV rays.
Beyond their practical implications, new windows also brighten a home and can make it feel more spacious and welcoming—two aspects that won’t get overlooked by interested buyers.
Replacement using vinyl window frames are the most cost-effective. Expect to spend roughly $17,000 for every ten windows replaced (accounting for size and location) and see an ROI of about 72%. Wood-framed windows are $21,000 and 69%, respectively.
Backyards are critical to having a highly-livable home. They give us, our kids, and our pets extra space to roam and play in and provide room for additional areas that make even the smallest house seem huge.
Nowhere is this more true than with a deck addition, which extends a home's living space and provides ample room to relax, cook, or entertain.
An average-sized wood deck—16-by-20 square feet including four-by-four posts with railings and concrete piers—will cost approximately $14,000 to install. The return is an excellent 76% of the cost.
And don't confuse the wood deck with the vastly more expensive stone-tiled patio, which can cost upwards of $50,000 to install and only return half of that cost.
Similar to the siding replacement, this is a project you can easily accomplish while still living in your home. Take advantage of the extra space now, knowing it will pay dividends when it comes time to sell later on.
Entry Door Replacement
Finally, we saved the simplest renovation for last—another upgrade that directly impacts your home's curb appeal.
One of the most underappreciated aspects of selling a house is the home's marketing path— from the point when a potential buyer exits their car to when they enter the home. Arguably, the most vital part of this walk is the front door.
An immaculate facade and beautiful landscaping quickly fade when a buyer walks through a dreary and dilapidated front doorway. Luckily, a mid-range, steel door in a price range between $1,800 and $1,900 will keep hopes high while entering the house.
More than just an excellent first impression, the steel door, which comes in numerous styles and varieties, returns 75% of its value.
As you can see, there are many creative ways to increase your home’s value. From a revamped kitchen to a garage door with some personality and added curb appeal, when it comes to getting a return on your investment, even the smallest of touches can pay off big time.
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