Your home is your greatest investment, and as such it’s natural to think about the eventual return on any improvements you make.Whether you plan on staying in your home for years to come, or are considering putting it on the market in the near future, you want to make sure that money put into your home will add to its value.  If you thought a major kitchen or master bath redo would give you the most bang for your buck, you may be surprised.

Expenditure in curb appeal makes for a good investment.  A new entry door has a 90% return on investment (“ROI”). Masonry veneer siding has a 91% return, and garage doors 76%.   Replacing roofs and windows are also high on the list.  These renovations serve two purposes. First, if buyers are not impressed with the exterior of the house, they won’t want to see inside. Secondly, these renovations improve the energy efficiency of the home and make maintenance easier.  Heating and cooling systems, plumbing and electrical issues, gutters should also be addressed. Buyers want to know that they don’t have to worry about replacing a roof or furnace, or spend a lot of time and money on home maintenance. And, if you’re not planning on selling, you will benefit from energy savings and that same freedom from worry.

This is not to say that cosmetic improvements aren’t important. However, sometimes it’s the smaller, less-expensive renovation project that adds the most value.  Refacing kitchen cabinets, adding new hardware, countertops, backsplash and sink will give you a higher ROI than a full kitchen renovation.   In a dated bathroom, replacing a worn tub, tile surround, flooring and vanity, will get you about 100% ROI.   However, if your house has only 1 bath, consider adding another bathroom, which will increase its value and marketability.

There are a few things to keep in mind when planning renovations. It’s your responsibility to obtain permits, not your contractor.  Also, keep in mind the value of your home, what homes in your neighborhood are selling for, when you plan to put your home on the market, and the type of project you’re doing.  A kitchen tear-down and replacement with top-of the-line appliances and finishes will not give you the ROI that you’d want based on similar homes in your market area.  However, if you are planning on staying in your home and that gourmet kitchen is your dream, go for it.  

If you are planning on putting your home on the market and aren’t sure where to put your home improvement dollars, your realtor will be able to help you prioritize what needs to be done to get your home in the best possible shape for selling.