Remodel Costs vs. Value – Increase Home Value Through Remodeling
Homeownership in Denver requires ongoing upkeep to help your home maintain its value, but you can also invest in upgrades that can build even more equity in your home. The trick is knowing what remodeling projects offer the best return on investment (ROI). Here we look at remodel costs vs. value to help you make the best decisions for your remodel investments.
Exterior improvements come in as the number one remodeling investment. Although most homeowners focus on their interiors, according to the 34th annual Cost vs. Value report several exterior upgrades come out ahead. Topping the list for exterior upgrades is garage doors. This is a great way to increase curb appeal for just a few thousand dollars, while also improving security. Installing insulated doors can also improve your home’s energy efficiency.
Siding comes in second including the new look and texture offered by affordable stone veneers. Despite the high-end appearance of stone veneer, it is almost half the cost of fiber cement siding, and several thousand dollars less than vinyl or wood. Stone veneer siding also brings in a higher return with an ROI of 92%. This is almost 30% more than other siding options. The third best cost vs value exterior improvement is vinyl window replacement.
Why Exteriors are So Popular
COVID put more emphasis on improved outdoor living spaces while also forcing homeowners to be more cautious about letting contractors into their homes. As a result, homeowners wanting to upgrade their homes looked to exterior projects as the logical option. Homeowners were also faced with increasing costs of outdoor projects including the highly popular deck. Skyrocketing costs of decking materials reduced ROI on this high-demand outdoor feature. Although in general terms buyers love outdoor spaces with decks, the cost vs value ratio means deck upgrades and installations are no longer cost-effective. Other factors impacting costs include pandemic-related supply-chain disruptions and increasingly more complicated trading tariffs.
Minor Kitchen Remodels
Investing in major kitchen remodels provides homeowners with their dream kitchen. You might be surprised to note that it is minor kitchen remodels that provide the best ROI. This is good news for homeowners who can save their money by making simple “facelifts” to their kitchens. A focus on kitchen surfaces including cabinet refacing/painting, new counters, backsplash upgrades, and new flooring are all affordable remodeling projects that provide higher ROI. Other details to bring your kitchen to the next level include upgraded cabinet knobs, lighting, and faucets.
Understanding Cost vs. Value
From a real estate perspective, cost vs. value is based on two main factors:
- Curb appeal: The first impression of a home starts with the exterior. Curb appeal has a strong influence on home values. This is why exterior renovations top the list. Prospective buyers are greatly influenced by the appearance of the home, which begins with exteriors that show pride of ownership and character. Broken garage doors, siding with outdated colors and peeling paint, and windows with cracked frames all greatly reduce the perceived value of a home in the buyer’s eyes.
- Personal Taste: One of the reasons major remodels of important rooms like kitchens and bathrooms tend to see less ROI is that they are “discretionary projects” that tend to be overly customized to the homeowner’s needs or taste. As a result, they fail to meet the mass appeal that attracts the average buyer. Even the highest scale remodels can be viewed as distasteful, uncomfortable, or overdone by buyers, which is why these pricey remodels see less ROI.
With these two factors in mind, it makes sense that upscale master suite remodels and major kitchen remodels are at the bottom of the list for ROI.
Smart Remodel Decisions
If you want to make smart remodel decisions, considering cost vs. value is a good place to start. You can then consider what remodeling projects make sense for your needs. For example, if you feel your exterior is fine, and want to focus on interior projects, you should invest in minor upgrades with mass appeal.
These changes are also very budget-friendly, while still providing you with an improved living space that both you and future buyers can enjoy. You can discuss your needs with your contractor to understand the costs of your remodel ideas and compare these costs to your expected average ROI.
Your goal is to ensure your Denver contractor is qualified to provide superior workmanship using high-quality materials to make the most of your investment. Speak to us at Striking Remodels by Bell today.