Which home renovation projects will add the most value to your home? There are certain projects which have a much higher return, even as much as 87%.
Almost anything you do to your home will add value, but certain home renovation projects add a great deal more than others. When renovating your home or making a home addition, you should think in terms of ‘Investment Recoup’, or how much of what you spend you can get back, when or if you sell your home. This can also be important if you refinance your home and are looking to borrow against the equity.
The percentage of investment recouped listed here is based on professional work, or work done which has a professional look and feel. These projects can include room additions, new windows, finishing a basement, or adding a deck. You must always remember that just because you spend money on your home, does not mean the value of your home will increase. Your home is a huge investment and you should plan any modifications or additions to your investment very carefully.
Renovation Projects Which Add Value
Some of the lower end renovation projects include adding a backup power generator, a home office renovation, and a sunroom addition. It should be noted these are on the lower end of the best things you can do.
The home office renovation is the lowest return on investment of the group we will look at today. With a national average of just over £28,000, this renovation will recoup only 54.6% of the money you spend. A sun room addition costs far more, with a national average of over £71,000 but a return of only 56.7% of your investment. This means if you add a sunroom to your home and sell your home shortly thereafter, you will lose almost £31,000.
Adding a backup generator will recover only 57.2% of your investment of approximately £14,000. These items, while they may be important to you, will not be important to all buyers, and in some cases may turn away buyers. This is especially true of swimming pools.
Good Renovation Investments in Your Home
The next group of renovation projects has a much higher return on investment. These renovation projects will appeal to most buyers, and range in investment from £11,000 up to £56,000. Replacing windows has a good return on investment, as does any type of kitchen renovation, bathroom renovation, or adding an attic bedroom. With all of these you can recoup more than 70% of your investment.
Minor Kitchen Renovation (£15,000 avg. cost) – recoup 79.5%
Window Replacement (£8,500 avg. cost) – recoup 77.7%
Major Kitchen Renovation (£46,000 avg. cost) – recoup 76.0%
Bathroom Renovation (£13,000 avg. cost) – recoup 74.6%
Loft Conversion to a bedroom (£38,000 avg. cost) – recoup 73.8%
Best Renovation Projects for Your Home Value
The final two renovation projects to be looked at here, have the best return on investment of any renovation project you can perform on your home. One of the very best renovation projects for your home is the addition of a deck. The average cost of this project is a little over £11,000. On average the amount of your investment recovered will be almost 82%.
At the top of the list is siding replacement: By replacing conventional siding with either vinyl or fibre cement siding, has the highest return on investment of any renovation project you can undertake. Vinyl siding has an average cost of just over £10,000 and you can expect to recover almost 81% of your investment. Fibre-Cement siding has an even better return rate, of just under 87% of your investment.
You should always keep these numbers in mind, in addition to the neighbourhood in which you own your home. Regardless of the number of improvements made to a home, its value will be limited based on other homes in the area. While a home can certainly sell for more than surrounding properties, there will be a limit to the amount it can be over other properties in the area.