10 Ways to Increase the Value of Your Home

In a dour housing market, wouldn't it be nice to know
that your remodeling project would pay off when you
went to sell the property? Remodeling Magazine
evaluated the top remodeling projects, how the cost-
to-value has changed since the housing market
implosion, and which projects are still worth the
investment. Using the magazine's "Cost Vs. Value
Report for 2008-2009," let's look at some of the best
projects you can undertake and recoup the majority
of your cost.
Upscale Projects
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Siding Replacement (fiber-cement or foam-backed
vinyl). With the economic slump, home buyers aren't
being dazzled by bells and whistles as much as they
are improvements that will ensure lower repair and
utility bills. Although replacing current siding with
fiber-cement has lost value from 2007, it still nets an
astonishing 87% ROI. If you prefer a foam-backed
vinyl product replacement instead, you can still look
to recoup 80% of your cost. Window Replacement
(vinyl or wood). Windows are not only an aesthetic
feature. For most homeowners, they represent one
of the easiest ways to lower home heating and
cooling bills. By replacing your current windows with
more efficient vinyl or wood ones, you can save on
your utility bills, attract future home buyers and net a
nearly 80% (vinyl) or 77% (wood) return on your
investment. Bathroom Remodel. Depending on the
size and amenities of your desired bathroom, you
could expect to pay over $50,000 to tear out walls,
repair joists and wall studs, change structural
elements and make major layout changes, such as
switching a toilet and shower. However big the price
tag, you can still expect to recoup nearly 71% of the
cost (which would be $36,400 if you have a $50K bill)
when you go to sell. This project increased its value
since 2007, while its sister project – adding a
complete bathroom – fell in value. Major Kitchen
Remodel. Kitchens are typically the most frequently
used room in a home, so it makes sense that
investing money here is going to pay off when it
comes time to sell. While a major kitchen renovation
is usually the most time-consuming and expensive
home improvement job (averaging more than
$110,000), it's also one of the most profitable.
Regardless of the size of your financial layout, you
can expect to get a nearly 71% ROI. Deck Addition
(composite product). With families cutting their
entertainment budgets, they're spending more time
at home, so it makes sense that adding a deck
(composite, not wood) is a good investment. You can
plan on recouping 63% of your total job cost to boost
your home's value by nearly $24,000 if you paid the
average job cost of $37,000.
Mid-Range Projects
While all of the mid-range projects dropped in value
versus cost since 2007, there are still numerous
projects that will net you a significant ROI. Here are a
few of the best bets for your money:
Deck Addition (wood). If your bank balance can't
swing the higher price tag that comes with composite
decking, you may still be able to afford a wood
addition on to your home. While a wood deck would
cost you, on average, in the neighborhood of $10,000,
the resale value it will add to your home is more than
$8,600 – an 81.8% return on your investment. Siding
Replacement (vinyl). Fiber-cement or foam-banked
vinyl are often more preferable siding upgrades, but
getting vinyl siding replacements instead is still a
good choice. You can recoup nearly 81% of your cost
which, if the job cost you more than $10,000, means
you could add more than $8,200 to your home's
value. Minor Kitchen Remodel. With belt-tightening in
style, people are turning to minor kitchen
improvement projects instead of major overhauls. It
turns out that that choice is not only frugal, but
financially wise. While major kitchen remodeling jobs
can still, on average, return a nice 70% ROI for
homeowners, minor kitchen remodeling jobs net an
even higher 79.5% return. Attic Bedroom. Anytime
you can add bedrooms, you're going to add to the
overall value – and listed purchase price – to your
home. If your attic's dimensions allow you to convert
it to a bedroom, you may want to consider investing
the money to do so. You'll add some sleeping space
and net a nice 74% return when a new buyer puts
your home under contract. Basement Remodel. If
you're fortunate enough to live in an area with a
water table high enough to permit basements, you
should think about squeezing all the value you can
out of it. By remodeling and finishing a previously-
unfinished basement you can expect to get nearly
73% of your investment returned with a higher list
price, come time to sell.
Conclusion
If you have savings or access to reasonably-priced
credit, it's worth it to consider home improvement
projects that will produce the best return for your
time and money. Make sure you work with a
reputable, licensed contractor (to avoid costly errors
or budget overruns), and before you undertake any
project it's a good idea to check and see if it could
significantly increase your property tax bill.
While it may still make sense in the long-run to
undertake the project and add overall value to your
home, you may need to make a few budgetary
changes so that you don't get caught off-guard when
the tax bill comes.