Home Improvements That Don’t Improve Your Resale Value
Many homeowners view remodeling as an investment. It’s widely believed that making improvements, like upgrading kitchens and bathrooms, will increase the resale value of a property. However, recent reports show that many home renovations pay off much less than homeowners realize. Read on before investing in your next home improvement project.
Remodeling magazine recently released its 2017 value report, which evaluated 29 projects in 99 U.S. markets. The report found that the only home improvement that added more value than cost to a property was adding insulation to the attic. The consumer report also showed that smaller, cheaper projects provided a better return on investment than larger, high-priced projects like adding a master suite.
The Property ROI
Return on investment does vary by geographic location. It relies heavily upon your neighborhood, your city and also your region. For example, adding a feature that people have come to expect from your neighborhood is more likely to pay off than adding a high-end feature not found on most other homes in the area. Adding square footage to a smaller home in a neighborhood of bigger homes is more likely to pay off than attempting to make your home the biggest on the block.
Refreshing your kitchen with trendy finishes and high-end appliances may give you bragging rights, but it won’t pay off nearly as well as you might think. According to the Cost vs. Value report, a full kitchen remodel added 65% of the $62,158 average cost to a midrange home, and 62% of its $122,991 cost to an upscale home. However, a minor kitchen remodel – including replacing some appliances, laminate countertops and cabinet doors – provides a much higher return on investment. The return is about 80% of its cost for a midrange home.
Patio or Deck Additions
Always wanted a wide patio space where you can barbeque and host parties? While patios can add a lot to your quality of life, their return on investment isn’t as high as you would imagine. A 20-by-20 foot patio, with a new sliding glass door, fire pit and outdoor kitchen only yields a 55% return on investment. Opt for a modest 16-by-20 foot deck instead and you’ll see a 65% return on your investment, according to the Cost vs. Value report.
Master Suite & Bathroom Additions
Home additions are rarely profitable because of the sheer cost involved with these projects. Remodeling magazine estimates the cost of a midrange master bedroom addition at $119,533. The return is predicted to be just $77,506, which is a mere 65% of the cost. For an upscale home, the return is less at just 60%. Similarly, adding a bathroom will only yield about a 65% investment.
The Bottom Line
When making improvements to your home, don’t go big if you’re looking for a big return on your investment. Smaller projects go much further in terms of resale value, but that doesn’t mean you shouldn’t remodel your home if it makes you happy. Consider the overall improvement to your family’s quality of life and the cost of renovations when making remodeling decisions.
This post is not intended to be a solicitation for a loan. Pomo One Marketing, Inc. provides these blogs for entertainment and informational purposes only. Remember to consider all your financial options before making any decisions related to credit.