The Only Reason You Should Make an Improvement to Your Home

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If you’re planning a home improvement project this year, money expert Clark Howard has one thing he wants you to keep in mind.

He says there’s only one reason you should make a renovation to your home.

Clark’s Only Reason for a Home Improvement Project

Clark says the only reason to renovate your home is for your own enjoyment.

“The reason you do an improvement to your home is because you want to. Because you end up losing money when you do a home improvement; you don’t make money.

“It’s almost unheard of that any improvement to your home will pay you more in later resale value than what it cost you to do it. In fact, it’s typical that when you do a home improvement, you’re going to get about 50 cents back on the dollar in value when you sell your home.”

Clark says the exceptions are repairs or updates, such as painting or landscaping, that you’d usually do before you put your home on the market.

Home Improvement Projects Average Rate of Return

“Let’s say you spend $50,000 on a kitchen remodel. You’re going to lose somewhere close to $25,000 of that,” says Clark. “Because when you sell the place, you might get $25,000 more in value, but you’ve spent $50,000 to get there.”

There’s data to support Clark’s point. Remodeling Magazine’s 2023 Cost vs. Value Report discovered that a major kitchen remodel only recoups 41% of a homeowner’s investment.

The report concludes that the average rate of return on home improvement projects is 60%. The lowest rate of return is an upscale primary suite addition at 22%, while the highest rate of return is an HVAC conversion at 103%.

Improvements made to the outside of your home are generally better moneywise than interior renovations: According to the 2023 Cost vs. Value Report, 7 out of the top 10 projects yielding the greatest return on investment were exterior improvements.

Final Thoughts

Before starting any home improvement project, make sure you’re doing it for the right person. Clark says you should do it for yourself, not the home’s next owner:

“Please remember the real reason that you do a home improvement project, a home upgrade, a renovation,” says Clark. “You do it for your pleasure, not for your wallet.”

To hear Clark’s full take on this topic, listen to this segment from his podcast:

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