The NAR Magazine (called REALTOR) recently published a story about what improvements enhanced a home's value the most. It was also broken down regionally...
For the Southeast (they called it South Atlantic, DC, DE, FL,GA, MD, NC, SC, VA and WV), the absolute winner was a "midrange" 20 gauge steel entry door. Nationally, that change added 128.9% of the cost as value to the home. Here in the Southeast, it added 146.8%... with an expected cost of $1065 and a return on investment (RoI) of $1562.
Rounding out the top five here in the Southeast:
- Attic Bedroom - 90.0% - Cost $43,540, RoI $39,171. Honestly, I don't think that there are as many homes in the Atlanta area that would fit this profile as some other areas...
- Fiber Cement Siding - 86.3% - Cost $13,027, RoI $11,242. Obviously this doesn't apply to brick homes... And Hardi-Plank or similar sidings are much better for resale than vinyl or aluminum.
- Midrange Basement Remodel - 84.4% - Cost $55,337, RoI $46,707. This is a tough one... The perfect remodel for one buyer is perfectly wrong for another. So, I would say that finishing a basement should be done to meet the needs of the owner and resale should take a backseat.... that said, use quality materials and don't cut corners.
- Midrange Wood Deck - 79.8% - Cost $9,505, RoI $7,589. I'm not shocked by this one. It expands the liveable space of the home... more enjoyment. It also increases the visual appeal of the back yard.
I actually skipped Foam-backed Vinyl Siding at 80.9%. I think that it would depend greatly on the pricepoint of the home here in Gwinnett County, GA. Buyers looking at homes over $250,000 or so expect fiber cement siding here. However, homes uder $200,000 might be good candidates for higher end vinyl siding. But... The cost averages about $11,848 and the RoI averages about $9,580. So, the cost of Fiber-cement and the vinyl or similar.
Caveat...
One thing to keep in mind is that average costs vary and RoIs will vary even more. Much can depend on the neighborhood, style of home and age of the most recent renovations.
As an example, if the subject home is the only one with a substantial deck in the neighborhood, the deck won't add as much value. If all of the other homes in the neighborhood have a deck, then it could increase the RoI.
Obviously a brick home isn't going to benefit from siding, but replacing vinyl siding with other vinyl siding, or even replacing vinyl with fiber-cement may not increase the value as much.
Finally, freshening recent renovations might not be as effective as renovating a more out-dated area. A Midrange Minor Kitchen Renovation comes in at 77.7% (Cost $20,504, RoI $15,923). But, if the kitchen has modern appliances and cabinetry, it won't add much to the value to redo the room... However, if the appliances and cabinetry are severely dated, the value will get a much bigger bump.
DIY...
All of the costs assume that a contractor would be used for the work... So, there are a lot of repairs, renovations and upgrades that could be done by a COMPETENT home-owner and increase the value beyond the costs. However, that also assumes the value of the home-owners time to be zero.
from LaneBailey.com
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I'd love to hear from you...
Lane,
I am always surprised to see the costs. It sounds for me as extremely expensive. We do not have basements (the water table is too high, so they build on a slab, and also the siding is very unpopular, and is usually you can see it on town homes.
But this stuff is interesting.
It's clear ROI is highly variable. But one variable is simply the starting point. If a home is severely outdated but structurally sound, the ROI must actually be higher.
This proves the point of first impressions matter. Front doors are memorable and should be solid but welcoming.
I just want a Tiny House that I can pull around with me! Belated Merry Christmas Lane.
Lane,
I am surprised that the best investment seems to be the door... is that a fairly new development in RoI of improvements or has it always been ranked that high on the list?
As you touched on, I tend to believe that a remodel shouldn't really be undertaken unless that part of the house is substantially sub par for the neighborhood. That's really the best way to make sure you get a good ROI.
This may sound stupid, but if the ROI is always less than 100% why do we recommend improvements sometimes before the home goes on the market. At some point a remodel or at least an update must be worth more than the money put in when selling?
I like your point of finishing a basement for the owner to enjoy. I tell owners that here in Sumter because many think they will make a fortune because they put a ceramic tile floor in the kitchen. While it will increase appeal to potential buyers, it might not increase the bottom line like many owners think.
Thank you all for the comments
Susie - I know where a few of them are... ;^ )
Judi - I don't have the previous lists, but I don't recall seeing it ranked as highly before... but that is just my memory.
Gene - I seldom do, but when I do it is to bring the house up to par with the competition... and probably affects time on market more than price.