This post looks at the costs and return on investment (ROI) of some common home upgrades. Maybe you just bought a house and want to make it your home. Maybe youre ready to sell and want to know where youll get the biggest bang for your buck. Not all home improvements are created equal and your future plans can tip the balance.
If youre selling soon, go with smaller projects to improve curb appeal and first impressions, as there are very few actual upgrades you can make that will pay for themselves. The national average return is only around 64% of your investment, per inman.com and several other sources. On the other hand, if you anticipate staying in your home for several years you may want to do a project that may not return as much of your investment but might increase your enjoyment of your home or save you money on energy costs.
HGTV would have you believe that you must give every room a facelift before listing your house but that rarely makes financial sense. While buyers may appreciate a newly upgraded kitchen or bathroom, its unlikely youd add even 100% of the project cost to the homes value. Buyers may also want to make their own upgrades when they move in and if your finishes dont fit their style, something like a new bathroom may make your home less appealing.
If the roof is 25 years old or the siding is in rough shape, it may cause your home to lose out against a similar house without those issues but the difference in sales price will likely not be enough to pay for those major repairs. Buyers expect the house to have a functioning roof, for example, and are not willing to pay more just because the roof may be 5 years newer than the roof of another house. Having new siding or a hot water heater is the same. These are not wow items and functioning isnt much different than new to most consumers.
The 5 best midrange and upscale choices by return on investment (ROI) in the Boston area, according to Remodeling magazines 2017 Cost Vs. Value Report, are as follows (costs from Pillar to Post Inspection Home Inspectors):
- Attic Insulation (fiberglass)- $1.50-4/sq foot, 93% ROI
- New upscale garage door- $1,000 (single, wood) or $1,800 (double, sectional, wood), 85% ROI
- New exterior door (steel)- $650-750, 84.2% ROI
- New garage door- $850 (single, metal) or $1,250 (double, metal), 79% ROI
- Two story addition- $90-120/sq foot, 76% ROI
On the flip side, here are the 5 projects with the lowest ROI in Boston, also per Remodeling Magazine (costs from them as well):
- Backup power generator- $14,371, 47% ROI
- Bathroom addition- $54,958, 50.5% ROI
- Upscale bathroom addition- $97,284, 52.3% ROI
- Upscale composite deck addition- $46,436, 53.5% ROI
- Backyard patio- $60,376, 53.8% ROI
If youre selling your home in an area where homes sell slowly or where there are a lot of similar homes on the market, it may be worth it to you to show your home to be at its best. Although you wont break even on these projects, they may help your home sell faster and be more competitive with similar homes. Here are a few of those types of project with cost and, when available, ROI:
- Single ply membrane flat roof replacement- $5-10/sq foot, 58% ROI*
- Asphalt shingle- $1.75-6.50/sq foot depending on type, 58% ROI*
- Aluminum siding replacement- $4.50-5.50/sq foot, 74% ROI**
- Cedar siding replacement- $9-12/sq foot, 74% ROI**
- High-efficiency gas furnace (forced air)- $3,500-$4,500
- High-efficiency gas boiler- $6,500-$10,000
- Refinish hardwood floors- $2-5/sq foot
- Repainting walls (3 coats)- $1.25/sq foot
If you plan to remain in your home, other factors should be considered. Although you may still want to consider ROI as a part of your decision-making process, also consider what changes will allow you to maximize enjoyment of your home!
If youd like to undertake a major project, here are a few options with the associated average costs and, when available, ROI (all from Remodeling Magazine unless noted):
- Kitchen renovation- $24,539 to $74,351, 74.4 to 61.3% ROI
- Master suite addition- $144,353, 65.1% ROI
- Bathroom remodel- $23,202, 65.1% ROI
- Central AC (attic mounted, separate ducts)- $10,000+ or heat pump- $5,000-$6,000 (both from Pillar to Post)
- Add solar panels- $20,000-$35,000 (check our previous posts on solar!)
If youre looking for a smaller scale renovation, here are some upgrades you can make (costs from Pillar to Post unless noted):
- New hardwood floor- $5-10/sq foot or $10-$15 for pre-finished
- Ceramic tile floor- $5-10/sq foot
- Replacement double-hung windows- $40/sq foot
- Masonry fireplace with flue rough-in- $5,000+
- Gas insert fireplace- $2,500-$4,000
- Hot tub (fiberglass)- $5,000+
If youre selling soon, talk over any planned renovations with your real estate professional. He or she can help you spend your upgrade money most wisely. If youre just settling into your home, make it your own and try not worry about what the next owner may want. When youre ready to sell, there will be someone who loves what youve done with the place!
There are many ways to upgrade your home; for some other projects and associated costs check out the full list of remodeling and construction costs from Pillar to Post, or go to the website of Craig Henriksen, the local Pillar to Post Operations Manager. Its a great resource for the costs of some smaller projects or the individual pieces of larger projects. If youre more interested in the costs of larger projects or ROI, check out the full list from Remodeling Magazine. This also compares the cost and ROI in Boston vs. New England and the whole country; their website allows you to download the same information for other regions or years. Or, if youd like advice on specific projects or need a recommendation for a contractor, dont hesitate to reach out!
*Roof replacement ROI figure is average across all roof types so may vary
**Siding replacement ROI figure is average across all types so may vary
***Photo from Boston Building Resources, http://www.bostonbuildingresources.com/advice/cont...
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