Renovating your home can be a great way to gain extra space and give it a makeover. But can it also increase your home’s value?
Not all home remodeling projects offer the same level of returns on investment. While some upgrades can boost the value of your property, others might end up reducing it. Some projects don’t add anything at all.
If you plan on selling your house in the future, it would be in your best interest to implement home remodeling projects that make sense cost-wise. This brings us to an important question: which projects bring the best returns on your investment (ROI)?
This article will help you choose home additions that will boost your home’s value based on ROI.
- 1 How to choose projects that will boost your home’s value
- 2 Home remodeling projects that pay off
- 3 Home remodeling tips
- 4 Remodeling and selling your home in Napa?
How to choose projects that will boost your home’s value
First impressions do count. By enhancing the curb appeal of your home through exterior renovation projects, you are more likely to get significant returns on your investment.
This is according to Remodeling Magazine’s 2020 Cost vs. Value report. The study found that nine out of the top 10 projects with high ROI are outdoor replacement projects. It turns out that a minor kitchen renovation is the one indoor project that approaches the ROI of most exterior projects.
By prioritizing these exterior projects, you can potentially add to the curb appeal of your home and, in the process, boost its resale value.
To come up with the results, Remodeling Magazine studied 101 U.S. markets and compared the average costs for 22 popular renovation projects to see the ones that retain their value at resale. This was based on a survey that they conducted among 3,000 real estate agents and firms.
Here are the 15 home remodeling projects that deliver the highest ROI according to the 2020 Cost vs. Value Report (based on national data):
- Manufactured stone veneer: 96% cost recouped
Average cost: $9,357
Average resale value: $8,943
- Garage door replacement: 94.5% cost recouped
Average cost: $3,695
Average resale value: $3,491
- Minor kitchen remodel (mid-range): 78% cost recouped
Average cost: $23,452
Average resale value: $18,206
- Siding replacement (fiber cement): 78% cost recouped
Average cost: $17,008
Average resale value: $13,195
- Siding replacement (vinyl): 75% cost recouped
Average cost: $14,359
Average resale value: $10,731
- Window replacement (vinyl): 72% cost recouped
Average cost: $17,461
Average resale value: $12,761
- Deck addition (wood): 72% cost recouped
Average cost: $14,360
Average resale value: $10,355
- Window replacement (wood): 69% cost recouped
Average cost: $21,495
Average resale value: $14,804
- Entry door replacement (steel): 69% cost recouped
Average cost: $1,881
Average resale value: $1,294
- Deck addition (composite): 67% cost recouped
Average cost: $19,856
Average resale value: $13,257
- Roofing replacement (asphalt shingles): 66% cost recouped
Average cost: $24,700
Average resale value: $16,287
- Bathroom remodel (mid-range): 64% cost recouped
Average cost: $21,377
Average resale value: $13,688
- Universal design bathroom: 62% cost recouped
Average cost: $34,643
Average resale value: $21,463
- Roofing replacement (metal): 61% cost recouped
Average cost: $40,318
Average resale value: $24,682
- Major kitchen remodel: 59% cost recouped
Average cost: $68,490
Average resale value: $40,127
Home remodeling projects that pay off
By choosing the right renovation projects, you can sell your house faster and for more money.
Looking at the list above, we can see that adding manufactured stone veneer to your home’s exteriors can bring a 96% return on your investment. Replacing a garage door could potentially pay you back 94.5%. Upgrading siding, replacing windows, and installing new decking and a new front door are other outdoor home improvement projects you should consider.
A minor kitchen remodel, which registered a 78% return, suggests you don’t have to go all-out in your kitchen renovation to boost your home’s resale value. It’s also interesting to note that bathroom renovations did not even enter the top ten, especially since they’re always included in home improvement ideas. Let’s take a closer look at these top ROI projects to learn how and why they’re worth every penny.
- Manufactured stone veneer
Manufactured stone veneer is popular because it is more affordable, lighter, and easier to install than natural stone.
Also called faux stone, this material is a combination of Portland cement, iron oxides, and aggregates. The mixture is baked in a mold to make it look like natural stone.
By replacing portions of your house siding with stone veneers, you can dramatically improve curb appeal and potentially increase your home’s value.
- Garage door replacement
Installing a new garage door will improve security and increase the energy efficiency of your house. Pick a high-quality, custom garage door that enhances your home’s architectural features. The right garage door may even help to give your home a “wow factor.”
Unlike the other home remodeling projects on this list, a garage door installation takes less time and effort.
- Minor kitchen remodel (mid-range)
Renovating a kitchen is a popular method of home improvement and with good reason: having an aesthetically pleasing and well-designed kitchen is a huge selling factor. Buyers often evaluate the kitchen in order to determine whether a house is worth its price tag.
Minor improvements you can do to your kitchen include painting it a new color that complements the rest of the house. You can also opt to redo the flooring and get the cabinets refaced and installed with new hardware. Laminate countertops could be replaced with a more durable stone surface that is more appealing to homebuyers.
Since this is a mid-range home improvement project, the total cost is considerably more expensive than other projects on this list. That said, you can potentially recoup more than half of your investment when done right.
- Siding replacement (fiber cement)
Old, dilapidated, or rotted siding isn’t just an eyesore. It can also negatively affect the value of your house. What’s worse, damaged siding might mean that your house is no longer secure from moisture, pests, and the elements (rain, sun, wind, snow).
Fiber cement siding is a preferred replacement because it combines the attractiveness and suppleness of wood with the durability of cement. Aesthetically, it can give your home a fresh new look. It is also interesting to note that fiber cement siding boards do not expand or shrink like wood. Best of all, it’s fire-resistant.
- Window replacement (vinyl)
Since windows take up a significant portion of both the interior and exterior of your home, take the time to upgrade them. Doing so will help your property stand out when it’s time to sell.
There is now a trend to replace single-pane windows with vinyl windows because vinyl is more cost-effective and energy-efficient. Remodelling Magazine indicated that it would be best to install vinyl windows that are insulated and have low-E (low-emissivity) so that you can save hundreds of dollars in heating and cooling costs.
Note that this might not apply to older properties as vintage integrity is a desirable feature among such homes.
- Deck addition (wood)
Improve your home’s outdoor area by adding a wooden deck that can be used as an extension of your living space. Get started by carefully considering the size, location, and design of the new deck as well as its connection to your house. Take time to observe the amount of sun, shade, and wind received by your target area.
Based on the study, the average deck addition usually measures 16 by 20 feet. Don’t keep it bare — add built-in benches and planters using leftover materials to maximize the space.
- Window replacement (wood)
Wooden windows are considered to be the ones with the best insulative value. It also helps that they look beautiful and are considerably strong. One disadvantage, however, is that they require more care compared to aluminum, vinyl, or wood-clad frames.
Continue reading to find tips you can use for your upcoming home renovation project.
Home remodeling tips
Here are some home renovation tips that will help you customize your home to meet your needs while increasing its resale value.
Set a home renovation budget
The first step involves creating a renovation budget to help you stay on track. In order to set a smart and realistic budget, do some research and determine the extent of the project. Are you going for a complete remodel or a mid-range upgrade?
Use a remodeling cost estimator or a renovation budget calculator to help you come up with a realistic budget. Don’t forget to take into account the costs for labor, building materials, and building. Set aside at least 10% of the home renovation budget for unforeseen expenses and costs.
Prioritize your must-haves list. If the price tag exceeds your budget, remove project elements that are dispensable. You can also consult your contractors on how you can decrease costs to ensure that the overall budget is still balanced. Use a budget planner to keep yourself accountable and on track.
Choose contractors carefully
What is one of the best ways for you to maximize ROI? Get the renovations done right the first time and minimize costs where you can. To do this, choose a reputable contractor whom you can trust and who also offers competitive pricing.
So how do you choose the right contractor?
- Request cost estimates from at least three trusted contractors before choosing one to renovate your home.
- When asking for quotes, give contractors very specific and detailed information so as to give them a clear idea of what you want to achieve.
- Don’t rush your decision. Take the time to reach out to their previous clients and references. Check if they have websites or online testimonials.
- As much as possible, choose a contractor with over three years of experience and is a member of the National Association of the Remodeling Industry (NARI).
- Interview the prospective contractors and ask them about the construction process and the planned materials and layout.
Be upfront about your target budget. This way, both of you can find more cost-effective alternatives and adjust the renovation plan if necessary.
Make a home renovation timeline
It is important to create a realistic timeline to keep the project on track. Delayed home renovation jobs not only hinder you from enjoying your home — it can also incur additional costs as the days go by.
Talk to your contractor to set the deadlines for making decisions and make a timeline template. Create a spreadsheet that will break down each step, as well as the labor and materials needed to complete it. Then add cost and time estimates for each step.
Insist on a detailed contract
It will be in your best interest to have a contract or legal document that details the terms of your construction project. It will define the work to be done and could be as specific as spelling out the materials that you want to use when renovating your house.
Make sure that the contract has your correct address, the start date, and the target completion date. It should list down payments, the construction scope, services to be rendered, and other deliverables so the project can be finished on time.
As a homeowner, consider getting a fixed-price contract wherein you and the contractor can both agree on the final cost of the project upfront. This fixed-price contract indicates exactly how much a project will cost including labor, building materials, and permits. Your entire budget will be spelled out, helping you ensure that you have enough funds to fulfill your end of the agreement.
Open up walls and spaces
Having an open plan layout is becoming an increasingly popular trend as the demand for large spaces that are light and airy continues to grow. Consider removing internal walls in order to transform your house, creating more space and bringing in more light.
Before you break down walls, check the orientation of the room and observe the passage of the sun at certain times of the day. This will help you figure which areas get the most light. Furthermore, it is essential to be aware of the structural implications. Consult a structural engineer early on.
Keep resale in mind
Renovating your home requires a lot of energy, time, and cash. For this reason, it would be a good idea to keep the potential resale value in mind before undertaking a major renovation. Any renovation decision you make now can impact the return on investment of your property in the future.
While this article discussed renovations with high ROI based on national data, particular home remodeling projects may have more or less value depending on the location of the property. Please don’t hesitate to reach out to me for more perspective on this.
It helps to consult professionals and have them double-check your plans. They might be able to identify issues you may have overlooked. They can also improve your plan and budget to make them more efficient and cost-effective.
The best way to determine how home improvements can increase the resale value of your property is to talk to me. We can discuss local trends and I can help conduct research about recent home sales in the area. This way, you can make an informed decision before you start knocking out walls for a major home renovation. (Check out these properties currently for sale in Napa to see the must-have luxury home amenities and features.)
I can also give you an estimate of roughly how much money homebuyers in your target area are willing to pay. It’s crucial to have a realistic idea of how much you can get for your property before you invest in renovations.
Remodeling and selling your home in Napa?
In conclusion, the right home remodeling projects can increase the value of your home. When the time comes to sell your home, these upgrades could attract a larger number of home buyers and investors who are interested in the Napa real estate market.
As a Napa Valley resident and a top-ranking realtor in the area, I have extensive real estate experience that covers different parts of the Napa Valley wine region. Allow me to provide you with the data and tools you need to remodel and sell your home for top value, starting with a comparative market analysis of similar properties sold in the Napa Valley real estate market.
From there, we’ll take a closer look at buyer preferences and other relevant information. All these will help us determine which home renovations will work well for your property and, in the long run, your real estate goals in Napa Valley.
Let’s get started! Get in touch with me today at 707.319.1887 or send me an email at joe(at)ownnapa(dotted)com to schedule a confidential real estate consultation. If you’re still figuring out your next steps, you’re more than welcome to browse the latest listings in Napa to get some inspiration.