Sinking cash into your ready-to-sell home may seem like a good idea — until you realize not every home improvement project will boost your home's value by as much as you pay.
According to Remodeling Magazine‘s 2023 “Cost vs. Value” report, if you want the best bang for your buck, then install an electric heat pump in place of a fossil-fuel-burning furnace. You might also recoup your installment costs by replacing your garage door and residing your home with stone veneer. These projects boost your curbside appeal and give your home that wow factor that makes buyers bid higher than your asking price.
As far as projects that don't return your investment, the reports listed numerous popular projects that might surprise you. With that in mind, here are four renovation projects you might want to reconsider.
1. Major kitchen renovation
- Cost: $154,483
- Resale value: $48,913
- Percentage recouped: 31.7%
Major kitchen renovations are likely not going to return the money you spend on them. While they can certainly appeal to buyers, certain big, lavish kitchen improvements — such as adding an imported ceramic backsplash and stone countertops — don't guarantee a big boost in home value.
Instead, consider a minor kitchen renovation. In fact, a minor update, which includes replacing laminate countertops and updating stoves and refrigerators to energy-efficient models, would cost about $26,790 but would add roughly $22,963 in resale value (85.7% in costs recouped). You can still “wow” buyers with a new kitchen, albeit without overspending.
2. Upscale bathroom remodeling
- Cost: $76,827
- Resale value: $28,203
- Percentage recouped: 36.7%
In the same way that a major kitchen renovation doesn't recoup value well, an upscale bathroom remodel also ranks low on the list. In this case, a major bathroom renovation would involve enclosing a neo-angle glass shower, adding stone countertops with two sinks, and compartmentalizing the toilet (with its own door).
A minor bathroom remodel, however, could help you recoup about 66.7% of what you spend. According to Remodeling Magazine, minor renovations would cost about $24,606, but could boost your resale value by $16,413.
3. Add a composite deck
- Cost: $23,430
- Resale value: $9,325
- Percentage recouped: 39.8%
Adding a 16 x 20 foot deck with stairs, built-in planters, and a complete railing system would cost about $23,000, but boost your resale value by only $9,000. Installing a wood deck of the same dimensions, however, would help you recoup at least half of the project's cost. A $17,000 project could give you about $8,550 in resale value, according to Remodeling Magazine.
4. Install a metal roof
- Cost: $47,414
- Resale value: $23,163
- Percentage recouped: 48.9%
Metal roofs are durable, non-combustible, and reflect sunlight well. They're also expensive to install and may not boost your selling price by as much as you pay. If you need to replace your roof — and you don't want to overspend — try going with asphalt shingles. According to Remodeling Magazine, an asphalt roof replacement with shingles would cost about $29,136 but boost your home's value by $17,807.
One caveat I'll add: Remodeling Magazine‘s “Cost vs. Value” report gives national averages and estimates and may not reflect what works in your market. For instance, if metal roofs are popular in your area, home buyers may be willing to take out a larger mortgage loan just to have one. If you're unsure, I would talk to your real estate professional to see if they know which renovation projects will likely give your home's value the biggest boost.
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