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mokee81/Getty Images July 07, 2022 Sean Jackson is a creative copywriter living in Florida. He’s written articles for Realtor.com, CNET and ZDNet. Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Bankrate logo The Bankrate promise
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Each year, Remodeling magazine analyzes costs for major remodeling projects with the value those projects retain at resale. Recently released, compares the average cost of 22 remodeling projects in 150 markets throughout the U.S. Here are the six home remodeling projects that nationally deliver the highest returns on investment (ROI), according to the report. So if you’re thinking of , these are the renovations that should top your to-do list.
1 Garage door replacement
Average cost: $4,041 Average resale value: $3,769 Cost recouped: 93.3% A good-looking is high on the list when it comes to getting cash back on your investment. The estimate for this job is based on the cost of removing and disposing of 16-by-seven-foot garage doors and replacing them with four-section doors with heavy-duty galvanized steel tracks, and assumes you’re reusing the motorized garage door opener. This enhancer could get you back nearly the entire amount (93.3 percent) of what you spent on it when you sell your home — one of the few home remodeling projects to do so.
2 Manufactured stone veneer
Average cost: $11,066 Average resale value: $10,109 Cost recouped: 91.4% Stone always imparts a classic, classy vibe. Replacing vinyl siding with stone veneer — even on just a part of your home, such as the entryway — can greatly enhance the exterior and, again, the curb appeal of a house. The average cost estimate accounts for 36 linear feet of sills, 40 linear feet of corners and one address block, and materials including two water-resistant barrier layers and corrosion-resistant lath and fasteners. This project also recoups almost all of its cost (just over 91 percent).
3 Minor kitchen remodel
Average cost: $28,279 Average resale value: $20,125 Cost recouped: 71.2% A modern-looking and functional kitchen can of course boost your enjoyment of everyday activities like cooking, sharing meals with your family and entertaining friends. It’s a strong selling point with prospective home buyers too. A as the report defines it, is based on a 200-square-foot kitchen with 30 linear feet of countertops and cabinets, where you might be replacing appliances with new, more energy-efficient models; refacing cabinets with shaker-style panels; installing or a sink; replacing hardware; adding new flooring; and repainting the walls. Except for the appliances, it mainly involves cosmetic changes, and that’s how you’ll recoup close to three-fourths (71 percent) of your outlay. If you’re thinking ROI, keep the project modest. Interestingly, major kitchen remodels that involve changing the room’s size or layout, or installing , return much less: 53–57 percent.
4 Siding
Old or dilapidated siding can make even the nicest, structurally sound home look worn-out. The report considers replacing it with two types of quality man-made materials: fiber-cement and vinyl. Fiber-cement
Average cost: $22,093 Average resale value: $15,090 Cost recouped: 68.3% For the average home, replacing 1,250 square feet with new fiber-cement siding will cost you just over $22,000 and you can expect to get back more than two-thirds of that investment upon resale. This upgrade includes 4/4 and 5/4 trim (4/4 and 5/4 are fractions measuring thickness). Vinyl
Average cost: $18,662 Average resale value: $12,541 Cost recouped: 67.2% can be more budget-friendly than fiber-cement siding, but it has nearly the same ROI. The $18,662 average cost estimates replacing 1,250 square feet with the new siding, and you should get back roughly 67 percent of that investment upon resale.
5 Windows
Windows are the eyes of the home, it’s sometimes said. Again, you have a couple of options, frame-materials-wise, which impact the ROI a bit. Vinyl
Average cost: $20,482 Average resale value: $13,822 Cost recouped: 67.5% You could recoup just over two-thirds of the cost to replace your if you install low-E, simulated, divided-light vinyl windows with a custom-color exterior finish. (Low-E means low emissivity, an energy saver.) You’ll want to ensure that the trim exterior matches existing ones, and the interior trim is left untouched, to keep costs within range. The average cost for this type of renovation — which accounts for 10 windows — will set you back $20,482. Wood
Average cost: $24,388 Average resale value: $16,160 Cost recouped: 66.3% If you do the above, but make the frames out of warmer wood windows (better for older or more ), you’ll spend a little over $24,000 for the job. Not surprisingly, since wood is more expensive, your expected return on investment drops by a full percentage point.
6 Deck addition
Having a finished to work, entertain or just relax in is tops on many prospective homebuyers’ wish lists. The deck remains one of the most popular sorts of “hardscaping” elements. And yet again, material does matter. Wood
Average cost: $19,248 Average resale value: $12,464 Cost recouped: 64.8% The is less expensive to install — though it requires more upkeep — and offers a pretty good return, close to two-thirds of its outlay. The estimate is for a 16×20-foot deck with a simply patterned floor, railings and stairs — plus a built-in planter and bench. Composite
Average cost: $24,677 Average resale value: $15,315 Cost recouped: 62.1% Composite decks have exceptional durability. You won’t have to worry about them rotting, warping or splintering like wood tends to do. As a result, they’re more expensive, which hammers their ROI somewhat, down to 62 percent. How to pay for home renovations
The good news is that there are a number of ways you can pay for them. To finance , consider a home remodel or home repair loan, which are unsecured personal loans you can get through a bank, credit union or online lender. You can also use , although the interest rates can be high. If you want to go the secured loans route, . You can obtain a (HELOC), which is a revolving line of credit that’s backed by your home. Because HELOCs are secured, they tend to have lower interest rates than unsecured loans. Alternatively, you could get a , also known as a second mortgage, which has a fixed rate, is paid out in a lump sum and repaid over a predetermined duration. A home equity loan might be a strong contender to pay for home improvement projects if you have a firm idea of what you want to do and how much it’ll cost. You could also do a , which swaps your current mortgage with a new, bigger loan so you’ll have the funds to make renovations. Refinancing comes with closing costs and can stretch out the length of your repayment period, but if you can get a low interest rate, it can be one of the more cost-effective options. Bottom line on home value-enhancing renovations
Bear in mind that these figures are national averages. Costs can vary greatly by region based on the cost of labor and materials, as well as the level of service offered. And they can change. “Inflation is a major factor in home remodel materials, as many common materials and contractors are increasing in prices,” says Mary Anderson, co-founder of Brotherly Love Real Estate, a Philadelphia-based firm that buys houses for cash. Particularly wood: The ROI on all the lumber-involved projects has dropped significantly this year, as prices have soared. Still, the right remodeling project can still worth over time. If you refinance, for instance, an appraiser takes renovations into account when estimating your home’s value. A higher home value means you’ll have more equity and a lower loan-to-value ratio. You might even be able to cancel earlier than anticipated. Likewise, when you go to sell your home, buyers are likely to pay more for a clean, well-kept property with modern updates that’s move-in ready . Other options suggested by Ryan David, owner of We Buy Houses in Pennsylvania, include, “Use tax refunds to pay for renovations. Or, use your business funds if you have, for example, an S Corp. If you are flipping homes, the money you use you can write off as business expenses.” SHARE: Sean Jackson is a creative copywriter living in Florida. He’s written articles for Realtor.com, CNET and ZDNet. Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Related Articles