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Irrespective of whether they buy a fixer-upper or not, a majority of homeowners still take up certain repair and improvement projects to ensure their new home fits their taste.
Surveys show that 95% of people across the US plan to initiate some type of home renovation in the coming five years.
This indicates that a significant chunk of buyers are inclined towards improving their houses to some extent.
Moreover, most people end up spending more than they expect on the project they are undertaking.
In fact, the average homeowner expects to allocate close to $4,000 for their renovations in states like Kentucky, but looking at the current state of the market, these budgets are easily exceeded. Then, there is the issue of the returns that these investments have.
Not all home improvement projects generate similar ROI when it comes to reselling the house at some point down the road.
Although most major projects like renovating entire rooms, adding square footage, or improving the façade yield substantial returns, smaller projects like replacing garage doors, upgrading ventilation systems, and landscaping can vary with respect to the amount they add to the resale price of the home.
On average, a homeowner can expect to get a 60% return on their investments in renovation projects.
If you live in a metropolitan city like Louisville, these returns may be higher depending on current market demand and the favorability of the improvements you made in the eyes of potential buyers.
And it’s also the quality of the finishes, which is why if you are upgrading your bathroom, it pays well to hire a top Louisville bathroom remodeling company to handle the job for you.
That being said, here are some of the home improvement projects that can offer you the best returns:
1. Heating and cooling system upgrades
Thanks to the advancements in home technologies, people are more inclined to purchase and live in homes with at least some modern features.
Top on this list is smart HVAC.
These systems regulate the temperature in the house at all times and enable significant power and utility bill savings, especially when the home is unoccupied.
Electrification of the HVAC system, which is switching the conventional furnace with an electrified heat pump, is a home improvement project that offers the highest returns.
The average cost of this upgrade is roughly $17,750, but at the time of resale, it can offer a total addition of close to $18,400, which translates to a 103% return on investment.
2. Garage door replacement
One of the most affordable yet highly favorable improvement tasks is replacing the garage door.
Although the exact costs of the replacement can vary depending on the type of door you go for, on average, the project can set you back around $4,300.
The return, though, is identical to HVAC upgrades at 103%.
What this means is that you can expect this improvement to add roughly more than $4,400 to the final listing price of the home when you decide to sell.
As long as you’re not selling, you can enjoy the modern and functional door for yourself.
Not only does a new garage door improve the home’s curb appeal, but it also adds a pleasant vibe to the place.
3. Stone veneer siding
Another improvement project that can offer an expected return of 102% on your investment is replacing your home’s existing exterior siding material with stone veneers.
Commonly referred to as faux stone, this is a synthetic material that replicates the natural look and feel of stone without the drawback of excessive weight and mold infestation.
For an average home, the price tag of refinishing the exterior with stone veneers is $10,925.
The subsequent value of the upgrade at the time of resale is $11,177.
Of course, the prices can fluctuate depending on the current market, where you live, the type of material you go for, and the contractor you hire for the job, to name a few factors.
4. Replacing the entry door
As odd as it may sound, replacing the entry door with the steel one is the last improvement project that can offer a higher return than the total cost of investment.
At 101%, having a new entry door fitted to the property is 4th on the list of tasks that a homeowner can undertake, which offers the most returns with respect to resale values.
Market surveys show that an average door replacement, including materials, labor, and other overhead costs, can come to $2,214.
And in the current market conditions, this improvement can offer a median return of $2,235 on the price of the home.
Obviously, this number can go higher or lower depending on how long you live in or hold the property.
5. Vinyl and fiber-cement siding replacement
Even though these improvements won’t cover their cost when you finally list the house for sale, they are still valuable projects that can add significant value to the property.
For a vinyl siding replacement, for example, the average homeowner can expect to make a 95% return, while the fiber-cement siding replacement offers an 89% return.
Since both these projects have to do with improving the home’s exterior, various factors can influence how well they hold their value.
Louisville, Kentucky’s weather is described as moist-continental, which means that there is humidity during the summer and snowfall during the winter, both of which can affect the siding of the home.
6. Midrange basic kitchen remodel
Midrange means that your budget doesn’t fit high-end materials and appliances, so you are giving the kitchen an upgrade but only a relatively basic one.
This entails refacing the cabinets and adding fresh countertops, fixtures, flooring, and appliances that are not the most modern or sophisticated but are an upgrade from what was previously fitted.
This midrange remodel of the kitchen can offer an 86% return on investment for the typical homeowner.
Conclusion
There are just a few home improvement projects that offer a return on investment that is 100% or higher.
It is a fact that these costs and return rates are not set in stone, which means that they do offer an overview, but the exact figures can vary depending on a wide variety of factors.
So, it is best to consult with a reliable local contractor to ascertain the returns you may get in the market where your property is located.
