Home improvement projects are great. They improve your home while improving your lifestyle, but there is one other thing you should be considering during your planning stage. ROI, return on investment, is often overlooked when considering home improvement options.
There are some home improvement projects that are going to give you a much better ROI than others. For example, according to the experts, revamping your landscape comes with a 12% ROI on your investment, a full kitchen remodel will give you about a 15% return on your investment.
Planning your home improvements around the projects that will give you the best return is an easy way to budget and allocate funds.
Increasing Your Home’s Value
Keeping your eye on the prize (the prize is increasing home value) is a lot easier for some homes than it is for others. For example, about 12% of homes in the US were built before 1940. Let’s say you are in one of the 12% of homes. Increasing value is easier and here is why:
- Basic upgrades can have a larger impact when you live in an older home. Simple things to modernize the home can give you a great return. For example, upgrading plumbing fixtures, installing a new water heater, modernizing the electrical system, can all come with great returns.
- Older homes leave more room for improvement and they have great “bones”.
Whether you have a new home (built in the last 20 years) or an older home, there are some common grounds when it comes to home improvements and return on investment:
- Landscaping always adds value. Landscaping bumps up curb appeal. Hydroseeding a new lawn can help you to establish a lawn in about three to four weeks. It is an easily affordable method of improving your landscape.
- Another upgrade that will add value to any home is a new roof. A new roof can add up to 25% in value to your home. The ROI on a new roof is estimated to be about 75% of the purchase cost covered when you sell your home.
There are a lot of home improvements that will add value to our home, but then there are some that will make your life more comfortable but not tack on any extra value to your property.
Kitchen and Baths
There is a lot of people that gravitate toward kitchen and bath renovations. While it is a great option to do some upgrades, it is a myth that these rooms will deliver a high return on investment. The kitchen and baths both do add value but are typically not at the level that the homeowner expects or hopes.
One of the key mistakes homeowners make when they are doing home improvements is that they customize the space too much to their own liking. For example, a porcelain sink may be your idea of a great upgrade. However, the consensus is that most Americans prefer stainless steel. As a matter of fact, stainless steel is on the list of primary metals consumers purchase. The list also includes aluminum and rolled steel.
It may seem counterintuitive to consult popular material lists when you are making home improvements, but these lists can be very insightful when it comes to material trends and what is popular. It can be used as a guidepost to ensure that you are not over customizing your home and thereby affecting the value of your home.
Smart Home Improvement
You can improve the value of your home, and your lifestyle, by doing a deep dive into which improvements historically offer the best ROI. A little planning can go a long way in making sure you are putting your money where it counts.