Select improvements can still increase the value of a home

Posted by DB Wilson on Tuesday, April 3rd, 2012 at 1:35pm.

In a housing market whose future remains a mystery, it’s tough to invest in home improvements without knowing whether the effort and money will pay off if and when the house goes on the market.


Remodeling Magazine recently evaluated the top remodeling projects, how the cost-to-value has changed in recent years and which projects are still worth the investment. Using the magazine's Cost Vs. Value Report for 2008-2009 for comparison, Yahoo! Finance outlined the best projects for which homeowners will recoup the majority of the cost

Upscale Projects

  • Siding replacement (fiber-cement or foam-backed vinyl) – Impress potential and economic-savvy home buyers with improvements that result in lower repair and utility bills, such as replacing current siding with fiber cement. That  repair might net an impressive 87 percent return on investment, while foam-backed vinyl replacement can result in an 80 percent ROI.
  • Window replacement (vinyl or wood) – Windows represent one of the easiest ways to lower home heating and cooling bills. Efficient vinyl or wood windows can reduce utility bills, attract future home buyers and net a nearly 80 percent (vinyl) or 77 percent (wood) ROI.
  • Bathroom remodel – Even if  homeowners have to tear everything out and start from scratch, they can still expect to recoup as much as 71 percent of the cost of a bathroom remodel.
  •  Major kitchen remodel – Since kitchens are usually the most frequently used room in a home, improving them will pay off – 71 percent on the investment – when it comes to selling a home.
  • Deck addition (composite product) – As budgets shrink, entertaining at home is growing. Recoup 63 percent of the cost of installing a composite deck that allows homeowners to do entertain in fashion.

Mid-Range Projects

All mid-range remodeling projects have dropped in value since 2007, but several will still net homeowners a significant return on investment. Here are a few of the best bets, according to Yahoo! Finance:

  • Wood deck addition – A wood deck is suitable choice if a homeowner can’t afford a composite deck and the return on investment is as much as 81.8 percent.
  • Vinyl siding replacement – While fiber-cement or foam-banked vinyl are usually a more preferable siding upgrade, vinyl siding replacements instead are also beneficial. Homeowners can recoup nearly 81 percent of their investment in vinyl siding.
  • Minor kitchen remodel – Even a minor kitchen remodel can reap big benefits. The 79.5 percent return on investment homeowners will see on a minor kitchen remodel is even more than what they’ll receive on major remodels.
  • Attic bedroom – Bedrooms always add to a home’s overall value, so if the attic’s dimensions allow for it, consider investing the money to do so. Not only will the additional bedroom provide more sleeping space, it’ll net 74 percent return.
  • Basement remodel – Squeeze all the value possible out of basement by remodeling and finishing it, then witness a 73 percent return on the investment.

Making improvements to a home are a worthy way to invest savings or use reasonably priced credit. Work with a reputable, licensed contractor to avoid costly errors or budget overruns, and investigate whether any project could significantly increase the property tax bill before investing in it.

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