As with any investments, how you spend your money to remodel your home requires carefully weighing the importance of your goals against how much you’re prepared to risk. Of course, you may not place a dollar value on every investment you make; some things are not measured in dollars and cents — things like comfort or safety, for example.
What are your home goals?
When you look back, you’re likely to find the best home improvement investments were the ones that most closely satisfied your personal values, so before you choose the smartest way to spend your budget, prioritize what you need or want most.
Typical goals for remodeling your home might include one or more of the following:
- increasing its resale value
- expressing your taste through interior design and curb appeal
- maintaining and protecting your investment
- realizing added comfort, convenience and functionality
- achieving energy efficiency, savings on utilities or green upgrades
- building in storage solutions for more organization
- adding sleeping and living space
While there are some booming U.S. housing markets today where you can easily recoup more than 100 percent ROI on nearly any reasonable home upgrade, no one can guarantee how much return you will see when you sell your house. Real estate booms and busts are as inevitable as the rise and fall of the stock market. You pays your money and you takes your chances, as they say.
Real estate agents, home appraisers, house flippers and your Aunt Sadie may tell you to update your kitchen, bathroom, landscaping or front door to attract offers, but in the end, you may sell your house to someone because they simply ‘felt’ it was ‘the one.’ Likewise, deciding to invest in your home with a few nice upgrades or just some long-needed updates may come down to making the home more comfortable and appealing to only you and your family, based on your budget.
4 smart home improvement investments
These upgrades and remodels hit multiple goals:
- Best ROI for resale. If you’re looking strictly to recoup the most on your investment when you sell, install a new steel entry door. According to Remodeling 2015 Cost vs. Value Report, the national average ROI for a replacement front door costing $1,230 is 101.8 percent, the top return on a remodel. Furthermore, the results of an early 2015 Better Homes and Gardens survey of what home buyers want suggests that you might want to paint it a bright color — that’ll satisfy your goals for curb appeal and self-expression. Talk about a three-for-one!
- Tops for protection from the elements and energy efficiency. Remodeling’s 2015 Cost vs. Value also reports that a new fiberglass asphalt shingle roof provides a nice 71.6 percent ROI at a cost of under $20,000, and a standing-seam metal roof recoups 62.9 percent for a $36,329 investment. While the metal roof costs more and has a smaller ROI if you resell, it lasts 40 or more years vs. 25 years for the asphalt shingles. Plus, metal is considered a green roofing material — highly energy-efficient because of its solar reflectance, recyclability and longevity. Other energy-efficient upgrades that you or future buyers can appreciate include EnergyStar appliances, new furnace, replacement windows and ceiling fans, all with high comfort factors as well as resale desirability.
- Shiny good looks for the kitchen. If you’re preparing to sell, you’d be hard-pressed to find a real estate agent who’d tell you not to upgrade your kitchen unless you just did so. You don’t need to spend a fortune. While a major upscale remodel can cost you 10 to 20 percent or more of your home’s value, Remodeling’s Cost vs. Value report shows only a 59 percent ROI. However, they report a respectable 79.3 percent return on a minor midrange kitchen remodel of just under $20,000. Currently, recommended improvements still include stainless steel appliances and a granite or engineered stone counter, but rather than replacing your cabinets if they are sturdy — new cabinets account for as much as 40 percent of most kitchen remodel budgets — spruce them up with shiny new hardware and a coat of paint or other new finish. If you’re staying put and need to also improve kitchen functionality such as traffic flow, lighting and worn out cabinetry or just enhance the kitchen’s appearance, those also qualify as valid priorities.
- Extra space for people — and stuff. If you don’t have enough room for your family or your things, you can sometimes find additional living space without adding to your home’s existing footprint. Look up to the attic and down in the basement for added room you can finish as sleeping quarters or family entertainment space for less than a full addition can cost. Impress home buyers or improve your home’s functionality for you and your family by adding custom storage with built-ins and closet organizers. Utilize hidden space behind walls and beneath a staircase for a desk, bookshelves or a pantry.
Other smart home investments include ways of making your home environment safer such as universal design remodels for aging in place, young children or disabled household members. Home security systems that alert you via smartphone to smoke and carbon monoxide or strangers at your door and inside your home can be relatively inexpensive investments. You can’t always apply ROI in dollars and cents to convenience or peace of mind.
Want more money-saving advice for your house? See our Homes & Real Estate section.