Thinking about a home improvement? Here’s how much you can expect to recoup from it.
As a result of the COVID-19 pandemic, many of us have spent six months sitting around our houses, looking at our back porches, and wondering if it would be worth it to put in a new deck back there. Given that it’s been difficult to go on vacations or spend money in many normal ways, a lot of us have the cash for home improvements now. Will they pay off in the long run? Let’s take a look at some of the most remunerative upgrades:
- Studies have shown that remodeling your kitchen can add as much as 125% of the refurbishing costs to your home’s resale value. Not surprisingly, the biggest bang for the buck can come from the most visible elements, like fancy granite countertops or shiny new appliances. But don’t go overboard – if a fully remodeled kitchen ends up looking more modern or expensive than the rest of the house, you’re unlikely to recoup your investment.
- Surveys from the National Association of Realtors found that installing a new roof is generally a worthy investment. On average, homeowners spent roughly $7,500 on replacing the roof and got back $8,000 in resale value. They found a similar return for new wood floors, which cost about $4,700 while adding $5,000 to the home’s value. Simply refinishing an existing hardwood floor broke even.
- Converting an attic to an extra bedroom can be very expensive, running close to $40,000, but it tends to pay for itself. Remember the first thing any prospective buyer will know about your house is the number of bedrooms, so adding one puts you ahead from the get-go.
- A remodeled bathroom costs about $10,000, and tends to break even when it comes to resale value. It’s hard to imagine prospective buyer being excited about a bathroom with a cracked washbasin or rust-stained toilet, so the goal is to avoid anything that might turn a buyer away. If your bathroom is looking its age, you can do a few simple repairs yourself, like installing a new shower door or reglazing the tub.
- And finally, what about that deck? The website HomeAdvisor estimates that a new patio deck will cost somewhere between $7,000 and $24,000, depending on the size. And when you go to sell your house, you can expect to recoup about 80 percent of what you spent on it. So it’s not, in the end, a profitable investment – but at least you’ll get to enjoy many fine evenings out there.
It's important to treat your home like an investment, even though it’s much more than that. If you’re in the market for a house, or just want to think about your home as future buyers might see it, our Guide to Homebuyers could come in handy. At any rate, before you make a sizable investment in your house, it always helps to talk to your Financial Advisor.