Luckily, we can turn to a trusted resource for answers. Each year, Remodeling Magazine publishes their Cost vs. Value Report, tracking the average cost and ROI for common household fixes. The results may surprise you!
And the award for renovation project that yields the highest ROI is….the envelope, please…installing attic insulation.
Not exactly the kind of dazzling remodel you brag to neighbors about, right? But in fact, installing fiberglass insulation in the attic offered a super return of about 117%, or $1.17 for every dollar invested. The report found that the average cost to lay insulation in the attic was $1,268 nationwide, while it increased a home’s value by about $1,482 when it came time to sell or appraise, by far the highest on the list of 30 renovation projects evaluated.
Number two on the list was installing manufactured stone veneer to the exterior of a home, which offered a 92.9% ROI.
Next on the list for top returns was replacing a mid-priced garage door (91.5% ROI), replacing a steel entry door (91.1%), and replacing an upscale garage door (90.1%).
It’s interesting to note that 12 of the 15 highest ranked renovation projects were all on the outside of the house, reinforcing the notion that giving your home a face lift and improving curb appeal pay the biggest dividends.
The Cost vs. Value report also found that renovations with high price tags yielded some of the lowest ROIs and almost never paid for themselves.
For instance, even a basic kitchen remodel costs an average of $20,122 but increases the value by only 83.1% for each dollar spent. Larger projects, like adding a family room addition, cost an average of $86,615 but only increase the home’s value by 67.9% of that dollar figure.
Those paltry returns are no fluke, as the report shows a trend of the highest price projects not making dollars and sense when it comes time to sell. A midrange bathroom addition offered only a 56.2% ROI, an upscale bathroom addition 56.7%, upscale master suite remodel 57.2% ROI, and a high-end bathroom remodel yielded only 57.5% of the cost.
Four out of the five projects that cost less than $5,000 for a professional contractor to handle ranked in the top for cost recoup, but no project with a price tag of $25,000 or more ranked better than 15 out of 30 on the list.
In summary, think about simple, low-cost projects to the exterior of the house for maximum return on investment. If you are fixing up your home with the thought of improving the value with a sale or refinance in mind, concentrate on DIY renovations that spend hundreds, not thousands of dollars, as well as tangible improvements that will actually save money (attic insulation) or smaller, low-price renovations to kitchens and bathrooms.
Here is the complete list, including job cost, resale value and cost recouped – or ROI.