Which home upgrade to do first? Swimming pool? Sun room? What is important to you may not be important to others. So which one will actually increase the value of your home?
Before you dive into any home upgrade, it’s good to consider which projects will give you the best return on your investment (ROI). As you can probably guess, some projects have a much better ROI than others.
Each year Remodeling Magazine takes a look at a variety of projects, breaking them down by the type of project and the geographic market. Their 2015 study took a look at 36 different projects ranging from upscale kitchen remodels to entry door replacements.
Based on their study, you’ll get the best bang for your buck with smaller projects. In the Seattle area, replacing the entry door with a steel door was estimated to cost just $1,344 to install. It has an estimated resale value of $1,699. That’s a 124.2% return on your investment (ROI). Similarly, in the Seattle area replacing your garage door could result in as much as 121.3% return.
However, not all upgrades are created equal. You can only expect to recoup 55.1% with the addition of a backup generator and 53.9% with the addition of a sunroom.
Thinking about working from home? In the Seattle area, the addition of a home office delivers the lowest return, coming in at a whopping 53.3%. However, this doesn’t take into account the consistent tax write-off you can enjoy with a dedicated workspace. So, there is some give and take to consider with each addition. (Swimming pools didn’t even make the list.)
The long story short is, remodels are pricey and don’t typically add a significant amount of value to your home.
Does this mean you should never add a sunroom or swimming pool? No. Sometimes you make a decision that’s about your quality of life. Are you planning to stay in your home for an extended period of time? Is the upgrade you want within your budget? Will it greatly improve your quality of life? If you answered yes to all three questions, then going for it is a no-brainer.
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