Not all home improvement projects are created equal. Some projects deliver big rewards in the form of extra space, an upgraded look and a higher home value. Others might work well for you in the short-term, but they don’t do much for your home’s resale value over time.
If you’re going to pump money into your property, it makes sense to pay attention to the big picture. Specifically, which home remodeling projects will pay off in the long run? Which ones deliver the biggest return on investment? Let’s take a look.
Home Remodeling Projects That Deliver a Big ROI
Did you know that homeowners spend about $326 billion every year on home improvements? For most people, remodeling a home is something they’re forced to do in stages. Few people have the budget to tackle a total home renovation. This means homeowners must select projects that will pack the biggest punch both now and in the future.
In most cases, you can’t go wrong when it comes to making upgrades to your property. However, some projects are definitely more worthwhile than others if you plan on selling — or if you just want to make a sound investment that raises your home’s value.
According to research conducted by the National Association of Realtors® (NAR) and the National Association of the Remodeling Industry (NARI), some home remodeling projects can be counted on to boost your home’s value, make you happy you completed a project and make buyers flock to your property if you decide to sell down the road. Overall, 74% of homeowners say they’re happy they decided to tackle a home renovation project.
The NAR and NARI 2015 Remodeling Impact Report surveyed homeowners on eight exterior and 12 interior home renovation projects.
Interior projects included in the survey were:
- New master suite
- Kitchen upgrade
- Total kitchen renovation
- Bathroom renovation
- Bathroom addition
- Finished basement
- Finished attic
- Insulation upgrade
- Closet renovation
- New wood flooring
- Refinish hardwood flooring
- HVAC replacement
Exterior projects included in the research were:
- New steel front door
- New fiberglass front door
- New garage door
- New vinyl siding
- New fiber-cement siding
- New roof
- New vinyl windows
- New wood windows
The study also looked at how these projects stacked up in a variety of categories, including:
- Cost recovery
- Homeowner happiness
- Appeal to buyers
The following home improvement projects combine the highest levels of homeowner happiness, return on investment and buyer appeal.
Most ROI: Home Roofing
When it comes to combining overall homeowner happiness, buyer appeal and a higher home value, it doesn’t get any better than a new roof. That’s what researchers who conducted the study report.
Compared to both interior and exterior home remodeling projects, home roofing delivered top marks across all categories.
In the cost recovery category, a new roof returned 105% of its cost value at resale. This means that homeowners made more at sale than they paid to install a new roof. The home improvement companies surveyed by NARI reported an average cost of $7,600 to install a new roof. The Realtors® surveyed said their clients recovered an average of $8,000 in a sale after upgrading their roof. Interestingly, 32% of Realtors® also said that a new roof helped them finalize a deal.
After installing a new roofing design, 61% of homeowners said they had a greater desire to be at home.
While a new roof may not be as flashy or fun as, say, a kitchen remodel or the addition of a new bathroom, it can dramatically change the look of a home — not to mention its value. Most buyers don’t want to tackle a property that obviously needs a new roof, and many will be turned off by properties that have leaky or sagging roofs. By upgrading your roof, you could substantially improve your chances of making a quick sale.
If a new roofing design is high on your list of home remodeling projects, keep these tips in mind:
- Choose an Experienced Professional – While you might be tempted to save by DIYing your roof installation, this is a bad idea — and one that will almost certainly cost you in the long run. In fact, you can actually keep home remodeling costs down by working with an expert from the start.
- Plan (and Budget) for the Unexpected – It’s also important to expect the unexpected. If you watch any home improvement or house flipping show, you’ll probably notice that unplanned repairs often eat away at the homeowner’s bottom line. No matter how carefully you plan, you’re likely to encounter some hidden costs. Building some extra money into your budget can help soften the blow of a surprise repair.
- Don’t Lock Yourself into a Set Number of Estimates – Don’t limit yourself to three estimates. For that matter, don’t say you’ll stop at five or six, either. By the same token, don’t set a max number of estimates, either. The right number of estimates for a home remodeling or new roofing project is the number that makes you feel informed and comfortable with your decision.
Highest Level of Homeowner Satisfaction: New Bathroom
It’s probably no surprise that the home renovation projects that provide the highest levels of owner happiness are those that improve the most lived-in areas. Of all interior projects, the addition of a new bathroom made homeowners happiest.
The survey scored homeowner happiness on a scale of 1 to 10, with 10 being the highest level of satisfaction and overall “joy.” While the addition of a bathroom wasn’t the most costly interior renovation, it scored a perfect 10 out of 10 in terms of homeowner happiness.
On average, it cost homeowners $50,000 to add another bathroom to their home. By contrast, upgrading a bathroom was considerably more affordable at $26,000. Homeowners who upgraded recovered 58% of their cost. Those who added a whole new bathroom recouped 52% of their investment.
Best Buyer Appeal: Kitchen Renovation
There’s no question that house shopping is a visual affair. Buyers are drawn to homes with big curb appeal and showy interiors. Perhaps more than any other area, kitchens are heavily scrutinized by potential buyers. After all, the kitchen is the heart of the home, and homeowners spend a big portion of their time in the kitchen preparing meals, dining and socializing.
The survey results back this up. Of all the interior home upgrades, a kitchen remodel topped the list for greatest buyer appeal. A whopping 90% of homeowners said they enjoyed spending more time at home after their kitchen renovation, and 93% said they felt a sense of accomplishment when thinking about the kitchen remodel.
However, a kitchen renovation was not without a high price tag. The NARI Remodelers’ estimate came in at $60,000, making a kitchen overhaul one of the priciest projects a homeowner can take on. The recovered cost at resale was $40,000, so a kitchen remodel also falls short of totally recouping the investment.
Is It Time for a New Roof?
Whether you’re thinking about selling or you’d like to get more enjoyment out of your home, the survey shows that installing a new roof is a great way to increase your home’s beauty and value. Call Nu Look Home Design today to schedule a free in-home consultation with one of our roofing design experts.