How to Maximize Your Return on Investment For Renovations
Remodeling your home is a huge time and financial undertaking. The upside is that renovations can potentially increase the value of your home when it is time to sell it. If you are purely renovating for resale value, focus on these top 4 remodeling projects that will maximize your return on investment, according to the Remodeling 2018 Cost vs. Value Report (www.costvsvalue.com).
Manufactured Stone Veneer. Updating your home’s street facing facade with manufactured stone veneer offers the best return on home improvement. Los Angeles homeowners recoup 157% of their investment. The average resale value is expected to be $13,031 while the average cost is much lower at $8,288.
Garage Door Replacement. The second highest return on investment is replacing the garage door, where sellers can recover 145% of the cost spent. It is one of the lowest cost renovation items in Los Angeles with an average sticker price of $3,620 while bringing in $5,271 in resale value. Installing a new four-section garage door with windows in the top panel on new heavy-duty galvanized steel tracks while reusing the existing motorized opener can save some money.
Minor Kitchen Remodel. This project involves replacing kitchen cabinet fronts with new shaker-style wood panels and drawer fronts (including new hardware), upgrading cooktop/oven range with new energy-efficient models, updating laminate countertops and vinyl flooring, installing new mid-priced sink and faucet, and repainting trim and wall covering. The average cost in Los Angeles is $25,381 for an expected resale value of $28,734, or a return on value of 113%.
Wood Deck Addition. What better way to enjoy the sunny Los Angeles weather than adding a deck to your home! Using more cost effective materials will make a difference in your return on investment. Building with wood materials will cost on average $14,592 and bring in 101% in resale value while using composite materials will cost on average $20,835 and only recover 86% of the price in Los Angeles.
Even if you plan to be live in the home for a while, updating your home now will allow you to enjoy the renovations until you are ready to sell. Just keep in mind that some projects will never recover all or even most of the renovation cost. If you are considering selling soon, you may want to think twice before investing your money on the following expensive upgrades that offer little in economic return:
Backyard Patio. This includes installing a flagstone patio on flat ground behind the home with a glass door from the house, adding a gas-powered fire pit surrounded by mid-priced all-weather deck chairs, building a stone-veneer modular kitchen with gas grill, mini-fridge, sink and storage including underground gas and electrical connections, and erecting a wood pergola with overhead lights. With an investment of $65,789, the average seller will only regain 62% in value in Los Angeles.
Master Suite Addition. One of the most expensive renovations is adding a master suite to your home. On average Los Angeles homeowners spend $292,649 for a return of 63% to build a spacious sleeping area with lounging/sitting space adjacent to large master bath with many custom built-ins.
Buyers are picky and often have their own vision for the property so ask yourself what potential buyers would care about. If you plan to stay at your home long term, maintain a good balance by spending your money remodeling in a way you’ll most appreciate because your enjoyment value has no price tag.
Source: ©2018 Hanley Wood, LLC. Complete data from the Remodeling 2018 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.