Remodeling projects inside and outside the home can bring a good return on your investment while adding curb appeal for selling your house.
Even though housing prices nationwide have dropped over the last year, homeowners continued to improve their investments. Whether you’re considering remodeling to lend curb appeal or to make your homes more comfortable to live in now, there are projects that bring a solid return on your investment.
The National Association of Realtors (NAR) reported a seven percent overall drop in home prices in the last year. But Remodeling Magazine’s 2008-2009 Cost vs. Value Report shows that moderate upgrades and maintenance-related home improvements continue to pay returns. Recovering your investment often depends on your location, and payoffs are simply slower to recoup than in recent years when the market was booming.
Top Remodeling Projects in 2008
Homeowners want to know how much of the money they invest in remodeling will show up in the total housing price when they sell. In 2008, the greatest paybacks came from outdoor, curb-appeal projects such as new decks, replacement windows, and siding. For inside jobs, kitchen remodels reported the greatest returns nationwide in increased valuation, according to the NAR. Here are the winning projects:
- Fiber cement siding (upscale) brought an 86.7 percent return on investment (ROI)
- New wooden decks (using mid-range materials) brought back 81.8 percent
- New vinyl siding (using mid-range materials) returned 80.7 percent on investment
- Foam-backed vinyl (using upscale materials) held an 80.4 percent ROI
- A minor kitchen remodel (using mid-range materials) delivered 79.5 percent returns
- Vinyl window replacements (using upscale windows) had an ROI of 79.2 percent
- Wood window replacements (mid-range materials) brought back 77.7 percent
- Vinyl window replacements (using mid-range windows) had an ROI of 77.2 percent
- Wood window replacements (upscale materials) had a 76.5 percent return
- Major kitchen remodeling projects (using mid-range materials) had a 76.0 percent ROI
Keep Up with the Joneses
In deciding on improvements, you should evaluate what your neighbors are doing. If you’re in a subdivision that was built in the 1980s, for example, it pays to see if your neighbors have upgraded their kitchens or baths, have built improvements outside for curb appeal, and so on. That’s what you’ll be up against if you decide to sell.
Much of ROI has to do with your region. For instance, a remodeled basement might bring an ROI of 92.7 in California, while in New England you might be lucky to draw as large a return as 61.9 percent. In the Northeast, improvements that increase energy efficiency do better than they do in the Southwest.
Here are some easy-to-complete improvements which can also increase curb appeal:
- Clean up the yard, front and back, removing trash, clutter, and overgrowth
- Paint the exterior
- Wash windows and skylights and replace burned-out lighting fixtures
- Reface kitchen cabinets and re-paint the kitchen
- Finish floors and shampoo carpeting
You just might accomplish immediate gains by employing elbow grease and a few hours as opposed to spending a fortune.