In the current economy, making your money do double duty is ideal. This is never more obvious than in the pursuit of home improvements. There are a number of reasons you are considering a home improvement project. You may want to improve your family's comfort, add your own style and personal touches to a recently purchased home or update your home's appearance to create instant curb-appeal. Or you may need to replace outdated or broken appliances, HVAC systems, plumbing or wiring.
Some of these have a positive effect on your home's resale value, others do not. You can't put a price on your comfort or contentment with your home. However, it may not make sense to spend tens of thousands of dollars on a home improvement project you will still be paying for when you sell your home. Making renovations that increase your property value after restoration is the best way to make your home more comfortable without having to break your budget.
Sorting Out the Value of Home Upgrades and Improvements
Remodeling Magazine and the National Association of Realtors maintains a yearly average of the expenses you can expect from a given project, called the Cost vs Value Report. This record also shows you the increase in resale value that you can expect from specific improvements. A minor remodel of a bathroom or kitchen, or replacing parts of the exterior structure, usually has a better return on investment than projects with a much higher price tag. And, you may want to factor in that bigger rarely means better in home improvement plans.
These eight home improvement stories reveal the possibilities, and the precautions you should take, as you make over your home to strengthen the value of your investment.
1. Major Bathroom Remodel
You may be surprised to learn that the difference between a major and minor remodel is not strictly related to the total cost. A major remodel usually involves a significant redesign of the flow or function of the room. In this major bathroom remodel, the designer reconceived the entire bathroom, using space from an adjacent closet. She relocated the linen closet and toilet to create space for a separate bath and glass-enclosed shower. She removed black tile and countertops and replaced them with a marble countertop, chrome fixtures and white accents throughout the room.
For a major bathroom remodel, you can expect your home's value to increase between 63-73 percent of the total cost of the remodel. Adjusting the size or flow of the room can be a major expense that may not return as much value, unless it allows you to turn a powder room into a full bathroom.
2. Attic Bedroom
Adding a bedroom to your home without having to build on is an excellent way to increase your overall property value, as well as its attractiveness on the real estate market. A largely unused attic may be a fantastic option, provided you can meet building codes by offering two methods of exit. Making an attic bedroom in your home will return almost 73 percent on your investment.
This attic renovation becomes a lovely 200-square-foot master suite with the help of some creative approaches to the walls. Attics are often darker than other bedrooms, so pale colors are best to reflect natural and artificial light. The expert addition of wallpaper unified the color scheme without overwhelming the space.
3. Minor Kitchen Remodel
A minor kitchen remodel can improve your resale value by as much as 85 percent of cost, if you make the most of your existing features with smart, well-planned improvements. With this minor kitchen upgrade, the homeowners took dated cabinetry and color schemes to create a modern look. They saved considerable money by utilizing the existing design and features of the kitchen, specifically the cabinetry. By only removing a small portion of the cabinetry, homeowners gave themselves the option to dramatically alter the appearance of the space. With a new coat of paint, new cabinet doors and pulls and a clear view from dining room to kitchen, the kitchen appears more open and inviting. Making use of the material and features already in place added more money to the budget for a natural stone countertop and accessories like new barstools.
4. HVAC System Upgrade
If your home is similar to most Americans', you try to keep your HVAC equipment running as long as possible. Replacements can be costly, but there also comes a time when you cannot avoid getting a new system. This HVAC upgrade removed a system that was already 26 years old, well beyond the 10 years experts recommend for replacing an air conditioner and 15 years for a furnace. The new equipment, with the most current technology, demonstrated an immediate increase of 20 percent in energy efficiency for the home. The practical choice in sizing for the HVAC equipment and increased peak efficiency for both air conditioner and furnace makes the home more attractive to prospective homebuyers, as well.
5. Siding Replacement
The exterior siding on your home can affect the cost of home ownership in ways you may not expect, such as the increase or decrease of your utility bills. However, the biggest benefit for your property value after restoration of the home’s exterior is all about the curb appeal. In this siding example, homeowners removed vinyl siding from a 100-year-old rowhouse. The natural brick underneath looks far better and fits the historic neighborhood.
You may not have a brick structure underneath your siding, but you can still reap an 82 percent increase on what you pay to replace siding. If your siding is cracked, faded or provides a negative stark contrast with neighboring homes, you can upgrade it for a virtually instant improvement in your curb appeal.
6. Minor Bathroom Remodel
As with kitchens, the less you spend in a full bathroom remodel, the more you will gain. In this bathroom makeover, the yellowed walls and unfinished cabinetry before renovation would detract from the home's value. Without relocating fixtures like the sink or bathtub, these homeowners created the feel of a completely new bathroom. They replaced cabinetry and countertops with new construction and new faucets. Coordinating tile replaced old linoleum. A fresh coat of paint and unassuming accents brightened the room. Minor bathroom upgrades could net you up to 74 percent of your overall expenses.
7. Basement Remodel
In many cases, the way you grow with your home can become a way to make any space more appealing to homebuyers. In this second remodel of a basement, homeowners revised their previous design to accommodate their growing children. They removed the outdated darker color scheme and painted the walls the same color as the upstairs rooms. A hole cut into a wall surrounding previously-unused storage space under the stairs became a lovely reading nook. Although a basement remodel tends to cost more than many home improvements, you can still gain about 71 percent of what you paid.
8. Major Kitchen Remodel
A complete redesign of the kitchen often necessitates the construction and installation of new cabinetry, countertops, sinks, fixtures and lighting. You may also need to replace the flooring and hire a plumber to relocate a sink or add a second one. The final effect may be striking, but you should make sure it is worth the $100,000+ price tag.
This major kitchen remodel is a good example of the subjective nature of major upgrades. An upscale major kitchen remodel may only increase your resale value by 59 percent of the cost. As such, you should seriously consider what you stand to gain from each renovation you select. For example, changing out your fairly-new appliances for stainless-steel versions is unlikely to give you the same kind of benefit you would get if you replaced very old equipment with something new and top-of-the-line.
Balancing Home Improvements and Resale/Property Value
Before you spend a dime on home renovations, you should first check to see which upgrades are more likely to improve your property value after restoration. That way, you can opt for updates that give you the biggest bang for your buck.