Remodeling a home can be for a variety of reasons. You might need more space, desire a fresh look in your home, repair significant damage, or seek to improve current appliances. One aspect of renovations that should always be considered is how it can affect the value of your home.
It’s true that every improvement or remodel adds to the value of a home, but not all remodels add the same amount of value. Remodeling magazine lists on their website the amount you can expect to earn back on your home’s value based on national, regional, and city averages. Let’s unpack a few remodels for your home, and see which are less adept at increasing the equity for resale versus the required investment.
Higher ROI
Steel Entry Door Replacement
Average Cost: $1,777
Resale Value: $1,675
When adding to your home, it’s crucial to take a look at the first thing people will see when they arrive, your front door! When it comes to your main entrance, it’ll likely see the most use of any door in your home, so having a quality door installed is key. The value of having a solid barrier carries over with an average of over 90% of the cost being added to the value of the home.
Lower ROI
Fiberglass Grand Entrance
Average Cost: $8,901
Resale Value: $4,333
While a large entrance can really draw the attention of visitors and tie the whole face of your home together, it doesn’t guarantee that your home value will increase to the same amount that you put into it. Even though it will still increase the value of your home, with a return rate of less than 50%, there are other projects to pursue if your goal is increasing equity.
Minor Kitchen Remodels
Average Cost: $20,659
Resale Value: $16,438
In most casts, a smaller remodel is a great option for increasing value. There are fewer risks involved with changing small parts of a kitchen rather than taking it all out and starting fresh. This means you might get less than total personalization when it comes to changing up your food prep space, but you also won’t be putting more money than you might see coming back when you go to sell in the future. A minor kitchen remodel typically adds almost 80% of the cost of the job to the value of the home.
Backyard Patio
Average Cost: $53,678
Resale Value: $26,667
Backyard patios are nice, but don’t hold up their value for resale. It comes down to the specifics of the space. Some homeowners would prefer to design their own, so an existing patio might impede those future plans and dreams. While increasing the resale value of your home by around 50% of the cost of the project is nothing to scoff at, it might not be the best decision if your goal is solely increased resale value.
The Numbers
It’s not all about what percentage you’re getting back on your initial investment. For example, 50% of the cost of a large backyard patio is still more than the initial cost of remodeling your kitchen, and more than the total value of remodeling the kitchen, and front door entrance.
As far as projects purely for resale value, there are stronger candidates than others, but it’s also about what your home needs to stay up to date and keep you and your family comfortable and happy.
The Takeaway
Remodeling your home isn’t all about resale value. You have to think about what you want and the kind of home that fits you best. If you want to add a patio for you to enjoy for years to come, then by all means, build the best patio you can. This guide is about whether a project returns value in the resale of your home, but that doesn’t mean your home won’t increase in value for you and your family.
Having a beautiful kitchen, sprawling back patio, and expansive front door display can make a house feel like a home.
If you’re considering any new construction projects or remodeling for your home, go with professionals with years of experience. They can usually give you some advice on which projects will benefit you the most while you still live in the home, in addition to which ones will depreciate in value for resale.
