Renovations with the Highest ROI (Return on Investment)
Yesterday we talked about the hidden costs in home ownership and today we're talking about another type of cost -- renovations!
Some people love "fixer uppers" and some don't. Yet on average the american family moves every 7 years due to the need for a larger / smaller home or upgrades. Sometimes you can prolong the "life" or the "beauty" of your home some renovations; but they can be costly. Just remember that the overall return on your investment depends on a lot of things: the value of your house, the value of the houses in your neighborhood, the housing market, how soon you sell after making updates and the quality of your renovations.
Soooooo... let's talk about what renovations are the best return on your investment! I've laid out the top 5 renovations that yield the largest ROI, including the average cost of the job, resale value and the cost recouped.
1. Minor Bathroom Update
Average Job Cost: $10.5K
Average Resale Value: $10.7K
Cost Recouped: 102%
Some of the updates you can DIY, too, such as re-caulking your tub for ~$300. All you need is a softener like CAULK-BE-GONE or to re-glaze it!
2. Replacing windows
Average Job Cost: $11,066 Average Resale Value: $7,920 Cost Recouped: 72%
Yeah, I don't have the confidence to DIY on this, but if you do, please share how below!!
3. Maintenance (think fixing appliances, sprinklers, AC/heater, gutters, lawn care, light bulbs, etc)
Average Job Cost: $21,695 Average Resale Value: $15,790 Cost Recouped: 73%
TBH, we've spent a LOT of money this month on this. Our sprinklers broke, our hot water heater and garage disposal went out and we have to fertilize, air-orate, and top dress our yard to keep it from being a muddy mess. Oh, and our fire alarms (all 15 years old) broke and had to be replaced. This is a really important thing to note about home ownership - it's expensive. Keep in mind when replacing or maintaining things that "most buyers have a limit on what they can spend for a house. If they know they don't have to spend money on the upkeep of basic systems, then they're more likely to buy the house and consider upgrading the kitchen or baths themselves [or just buying a cheaper house in general to keep up with the regular maintenance costs] ."
4. Curb Appeal
Average Job Cost: $1,218 Average Resale Value: $1,243 Cost Recouped: 102%
Read my post on how to upgrade your curb appeal for some thrifty ideas here.
5. Adding space
So I don't have exact numbers here because it really just depends. HOWEVER, some key statistics are :
* Every 1,000 square feet added to a home boosts the sale price by 30%+ according to the 2005 study for the National Association of Realtors.
* Bathroom additions return 86.4% according to Remodeling magazine's report
* Attic bedrooms, family rooms and sun rooms return ~70-80%
5. Wood deck
Average Job Cost: $10,973 Average Resale Value: $7,986 Cost Recouped: 73%
Below are other great resources for more details on getting a good bang for your buck! Also remember that if you choose to DIY, you can always take classes at your local Home Depot or Lowes, too!
Happy renovating friends!