What is the top-ranking home improvement for improving resale value?
Believe it or not, according to Remodeling Magazine’s annual “Cost vs. Value Report,” a new front door adds as much as 97 percent of the amount you spent to purchase it. But it’s important to note that “it has to be the right front door.” Realtors will often tell you not to get anything too outlandish, or they might also recommend painting the current door for the same payoff.
After several years of declining home values, even in light of home improvements, the Cost vs. Value report finally yielded some year-over-year increases based on the type of improvements made. This is the second consecutive year of increases, which is a good sign for homeowners looking to sell.
In addition to front entry doors, windows and siding are among the more popular Colorado Springs home improvements. In general, they yielded a better financial return than larger remodeling projects, such as additions. However, realtors and contractors agree that updating a kitchen or bathroom can still bring a significant return, especially at the time of resale.
Kitchen projects tended to yield a higher return than bathrooms, with even a minor kitchen remodel returning 82.7 percent of its cost back to the homeowner. According to realtors, the reason why kitchens have such a healthy return on investment is that buyers assume they cost more than they actually do.
In reality, kitchen remodels average $18,856 nationwide, and that includes new cabinet doors, countertops, sink, appliances, paint and hardware. As great as it looks, the average homebuyer assumes a fully renovated kitchen like this would cost $40,000 or more.
Keep in mind though, that like a front door it is important to do the right kind of kitchen remodel. Don’t spend $75,000 to remodel the kitchen if the home is only worth $125,000. You will never see the return on this investment. Instead, remodelers recommend spending about 25 percent of the value of your home on a new kitchen and 12 to 15 percent on an updated bathroom.
Will your improvement pay off?
Whether your improvement will pay off is dependent upon a number of factors, including the neighborhood where you live and the average market value of homes in your area. Generally, renovations within the existing framework of your home – which do not require an addition be built – will return more value than adding extra rooms onto the home. Rather than putting on an addition, consider turning an attic into usable space.
Among the most popular home improvement projects today, most Colorado Springs homeowners focus on updating the envelopes of homes with new siding, windows and insulation. For people who plan to stay in their homes, investing in those projects, as well as in more energy-efficient heating and air conditioning systems and appliances, saves money all year.