Remodeling your home before you put it on the market is becoming a smart sales tactic; you can usually get the most bang for your buck with some easy renovations.
For 2014, the cost-value ratio, which expresses the resale value as a percentage of construction cost, stands at 66.1 percent, up 5.5 points over the last year and the largest increase since 2005, according to Remodeling magazine’s 2014 cost vs. value report.
“Significantly, for the first time in four years, improved resale value of residential housing had more of an influence on the cost-value ratio than construction costs,” according to the magazine. “A modest 2.2 percent increase in average national construction costs was more than offset by an 11.5 percent improvement in average national resale value.”
Back in 2010 and 2011, construction costs dropped but resale values fell even more. This year, rising resale value is driving up the ratio.
Some remodeling projects, especially replacements, are particularly worth it. These don’t cost as much money as other projects and have a positive effect on the value of your home, adding to its curb appeal.
Here are four remodeling projects with a high return on investment:
Installing a steel entry door. Replacing your front door has been a long-time favorite for those who want to boost their home’s value. This is the only project to return more than 90 percent of cost (it returns 96.6 percent.).
Adding a wooden deck. Building a wooden deck onto your home adds living space as well as an area to host outside. This project returns on average 87.4 percent of the initial cost, though the ratio is more than 100 percent in some 25 U.S. cities, Remodeling magazine said.
Changing your garage door. Replacing your garage door, whether with a midrange or upscale version, can usually be done at a low initial cost. It has a strong positive effect on curb appeal, returning close to 84 percent of your investment.
Remodeling your attic bedroom. With a national average remodeling cost of $49,438, this project has a cost-to-value ratio of 84.3 percent. Unlike building an addition on your home, remodeling the attic bedroom is an inexpensive way to add living space, says Remodeling magazine.
In general, it pays more to redo your kitchen than to upgrade your bathroom, the magazine also noted.
Top Reads from The Fiscal Times: