After a long treacherous winter, particularly in the Northeast, many homes are in dire need of spring fix up. But not all home improvement projects – whether inside or out -- make sense financially, especially if you plan to sell your home anytime soon.
A whopping 57 percent of some 1,300 homeowners surveyed in February by LightStream, a division of SunTrust Bank that focuses on home improvement financing, said they planned to spend money on home improvement projects this year. Considering snowstorms, ice dams, tree damage, broken pipes and other winter hazards, that figure may actually be even higher.
The majority of homeowners plan to spend more than $1,000 on all home improvement projects in 2015, including 37 percent planning to spend between $1,000 and $4,999 and 18 percent planning to spend more than $10,000. On the lower end, 27 percent of respondents plan to spend less than $1,000.
Here are the most popular home improvement projects according to the survey:
Outdoor projects: fixing deck or patio and landscaping: 43 percent
Home repair: new roof, windows HVAC or installing solar panels: 33 percent
Bathroom remodel: 29 percent
Kitchen remodel: 26 percent
While most homeowners (59 percent) plan to use savings to fund their projects, a sizable number plan to pay with credit cards (30 percent) or simply don’t know how they will fund their home improvement project (21 percent).
All the more reason to understand if the project is a good investment.
Remodeling Magazine’s 2015 Cost vs. Value Report describes which improvements boost the value of your home, especially if you plan to resell it, and which are just money down the drain.
Here’s how much you can recoup at resale on some of these projects:
Outdoor projects. These are actually some of the best investments you could make. For example, the average cost of adding a wooden deck is about $10,000, only slightly higher than the value you would get from it at resale (about $8,000).
Home repair. You’ll get a little less value from these types of repairs. Putting a new roof of your home costs on average $19,500 and has a resale value of about $13,975, allowing you to recoup 71.6 percent of what you spent when reselling. If you replace your old windows with new wooden ones, you’ll be able to recoup nearly 80 percent of the cost of the job ($11,341) at resale.
Kitchen and bathroom remodeling are quite costly and don’t return as much value, according to Remodeling Magazine
Bathroom remodeling. While it cost about $16,724 on average to remodel a bathroom, you would recoup only 70 percent of that cost at resale. Adding a whole new bathroom is really not worth it. It would cost you on average $39,578, but you would recoup less than 58 percent of that cost if you were to sell your home.
Kitchen remodeling. A major kitchen remodel costs on average $56,768 but you would recoup only $38,485 on average at resale, or less than 67 percent. You don’t lose as much money if you only do a minor kitchen remodeling, recouping nearly 80 percent of the cost.
The value of the upgrade may not be so easy to measure, however. A house with old kitchen appliances and cabinets and bathrooms that look like grandma’s house could turn off potential buyers who don’t want to spend the time or money on the upgrade. So what’s it worth to get top dollar on a quick sale?
Top Reads from The Fiscal Times:
- The 15 Worst Supermarkets in America in 2015
- It Just Got Even Cheaper to Travel Overseas
- 6 Traits of an Emerging Millionaire: Are You One?