Instant Resale Value: Choosing the Most Financially Sound Home Renovation Project
Homeowners looking to add value to their homes, whether for resale purposes or just to increase equity, often look first to possible renovations. A new kitchen here, a renovated basement there: These things can all increase your home’s value. Right?
The short answer is: not always. Certain home renovations are known for their value-enhancing powers, but others can turn out to be a short trip down a financial black hole. The key is to know exactly where to spend your money in order to reap the most benefit from your investment. According to the Cost vs. Value Report put together by “Remodeling” magazine, the average return on investment for 35 popular home renovation projects moved in an upward trajectory during 2013. Here are a few examples of remodels that are worth the time and investment.
Front door replacement
The replacement of your home’s front door is a fairly simple project that offers a lot of bang for your investment buck. A new entry door made of steel offered an 85.6 percent return on investment in 2013 (the highest percentage among projects included in the “Remodeling” study), while a door made of fiberglass represents a 65.9 percent return. Replacing an entry door is a simple enough task that involves little more than the mastery of a measuring tape, a drill and a buddy to help you take down the old door and put up the new one. The entire project can be completed in less than a day.
You’ll recoup a good percentage of your investment in a major (68.9 percent) or minor (75.4 percent) kitchen remodel, making such a project worth the time and money. When it comes time to sell, your renovated kitchen could put your home above others in the market, since buyers are looking for modern upgrades like stainless steel appliances and granite countertops. Just make sure not to take it too far; you don’t want to price yourself out of similar homes in your neighborhood.
Finishing your basement is a great way to add living space to your home without increasing the square footage. Perhaps this is the reason why a remodel of a previously unfinished basement reaped a 70.3 percent financial return during 2013. Whether your basement is a large space that you could convert to a man cave or an extra living room, or if you would divide up the area to include an extra bedroom or two, finishing the lowest level of your home is a solid investment.
Projects to avoid
Now that you know a bit about where to spend your money, it might also be helpful to learn which renovation projects to avoid. In-ground swimming pools are notoriously expensive to put in and maintain, meaning you likely won’t recoup your investment there. Also in the category of “gamble” are spending a lot of time and money on extensive landscaping (new homeowners often like to put their own spin on the outdoor space); eliminating a bedroom to make way for, say, a larger living room or kitchen; and putting in outdated changes like wall-to-wall carpeting.
No matter which projects you choose to tackle to increase the value of your home, it’s important to give some thought to how to finance them. Ideally, you would have savings to cover the cost of such a project, but many people need a bit of help to accomplish a goal of this nature. With Sears’ many credit options, you’re sure to find a financing plan that works for you. If you use your Sears card to invest in at least $299 worth of tools for the renovation job, for example, you may be eligible for 12 months’ special financing. If you’re able to sell your home within that one-year period, that would enable you to pay off your initial investment, interest-free.
Whether on a large or small scale, a renovation can increase the value of your home while also enhancing your enjoyment of the space while you continue to live there. Do your research carefully to decide which projects are deserving of the investment in order to make the best financial decision.