Whether your home’s functionality requires an update or you just want a new look, there’s one question nearly every homeowner will eventually ask: How will this boost my home’s resale value?
It’s a great question and one that’s highly dependent on both market trends and the specific project under consideration. Alas, neither contractors nor real estate agents have a magic calculator that can give you an accurate answer. The best we can aim for are educated estimates based on large swaths of data. Fortunately, each year Remodeling Magazine does exactly that.
The Remodeling 2017 Cost vs. Value Report compares the cost and resale value of 29 common home improvement projects across various national real estate markets. According to the Cost vs. Value Report’s trend analysis, “In general, the hotter the market, the bigger the payback. In San Francisco, 21 of the 29 projects had cost-recouped values above 100%, and in San Jose it was the same for 16 projects.” By looking at the San Jose market we can begin to understand local trends and determine the projects with the highest return on investment (ROI) for our area.
So, which project offers the best bang for your buck? You may be surprised to learn that installing attic insulation—a necessary update for increased energy efficiency—is the only project that returns a higher value than the cost at more than 270%. Using inexpensive fiberglass insulation lowers costs, and naturally, increases the value.
Still, there are numerous projects that allow homeowners to recoup their costs at resale, and many of them involve updating your home’s curb appeal. Replacing an entry door offers a boost as does a new garage door. In both cases, higher end doors will see greater returns. For instance, a high-end 4-section garage door with steel galvanized tracks, thermal seals and insulated glass windows will, according to the Cost vs. Value Report, cost upwards of $3,500 but will likely recoup more than 148% of your investment.
How about a more personal project, like a kitchen remodel? In fact, budget-minded homeowners will be happy to know that mid-range kitchen remodels promise better resale value than upscale updates. As noted in the report’s trend analysis, “Your idea of a dream kitchen might feature a highly ornamented French Provincial style, but when you put it up for sale the potential buyer might not care a whit because she prefers a sleek, ultra-modern look.” On the other hand, a minor kitchen remodel, defined as one that replaces cabinet fronts and hardware, laminate countertops, and flooring, as well as includes the installation of a new sink and energy-efficient appliances, is estimated to recoup 124% of the costs.
While it’s important to keep this data in mind, it shouldn’t be the final word on your next home improvement project. Unless you’re solely updating your home to turn around and sell it, what’s best for your lifestyle should remain your number one concern. Markets change and trends come and go, but you can’t put a price on your day-to-day comfort.
© 2017 Hanley Wood, LLC. Complete data from the Remodeling 2017 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.