For years, I’ve been tracking and publishing data on which home improvement projects give you the best bang for your buck. The National Association of Realtors (NAR) performs surveys each year they call their Cost vs. Value reports.
Now keep in mind, the values that are derived from these surveys are merely estimates. Sure, they poll real estate professionals, but the information we are given and asked to put a number on is very limited. We should all take these results with a grain of salt the size of the Grand Canyon.
Let’s get jump right in!
Top Return on Your Investment Home Improvement Projects
So let’s see which home improvement projects will give you the highest return on your investment. The report separates the Midrange projects from the Upscale ones, which I don’t find to be particularly helpful. I’ve included two charts for your benefit, but I’m going to aggregate them for the purposes of our rankings.
1. Entry Door Replacement
Just as expected, our preeminent project is replacing your home’s front door. According to the survey, this home improvement project returns 101.8% nationally. Outstanding!
Now, this is only when you replace your current door with a steel door (midrange). If you go fiberglass, also considered midrange, the ROI plummets to 72%, which I find problematic. Sure, the fiberglass door is going to cost you more, but I would estimate the ROI to be well over 100% for this improvement as well.
2. Manufactured Stone Veneer
In years past, this option wasn’t included in the survey. In 2015, however, respondents estimated a 92.2% cost recouped when adding a stone veneer accent to your home.
It’s interesting that this merely visual enhancement returns such a large amount while more functional projects, ones that can actually add square footage to the house, ranked much lower.
Keep in mind that each of these high-return home improvement projects varies with their estimated values in different parts of the country. Feel free to visit the NAR website to get data more specific to your state.
3. Garage Door Replacement
Another door ranks third on our list. The survey reports an 88.4% gain if you replace your home’s garage door. This is the midrange value. Moving to an upscale garage door, the value drops ever so slightly to 82.5%.
It’s interesting to note, that most values in this year’s survey have dropped from the previous year.
4. Siding Replacement
HardyPlank is a recognized leader in residential siding with a large number of fiber-cement siding products.
Sliding into the fourth spot is a siding replacement. Fiber-cement siding (upscale) achieved a survey value of 84.3% nationally. This beat the vinyl siding (midrange) return on investment of 80.7%.
HardyPlank, a fiber-cement product, has long been recognized for its wood-like appearance but with low long-term maintenance and increased safety. Other companies have joined the fray, offering similar composite materials as demand has grown.
It appears the increased price of the upscale option is worth the money if you are considering new exterior siding for your home.
5. Deck Addition
Nationally, it’s estimated that a standard deck addition would cost $10,048 and return a value of 80.5% to the homeowner. This is good enough for the fifth on our list of the best return on your investment home projects for 2015.
Look through the included graphics to see how other projects ranked in this survey.
I think it’s important to note that these values are only estimates. As I mentioned at the start, without more specific data, such as the home’s location, the level of finish of other homes in the neighborhood, and the property’s current condition, throwing a number at a project is somewhat arbitrary.
At the end of the day, these bang-for-your-buck home improvement projects are fun topics of discussion but hardly something I would put much weight on if I were a consumer.
What I do recommend is for you to speak with a local professional who really knows the market. He could visit your home personally and get a first-hand understanding of your particular situation before making an informed recommendation.
I have zero doubt many home improvement projects would return more than 100% of their costs — far more than reported in these surveys.
Here are the specifics of the research.
“An online survey containing project descriptions and three-dimensional illustrations, plus construction costs and median home prices for each city, was linked via email sent to some 200,000 appraisers, sales agents, and brokers. Respondents were instructed not to make judgments about the motivation of the homeowner in either the decision to undertake the remodeling project or to sell the house.”
If you’d like more information about the return on investments for your Louisville home, please contact me.