Are home renovations worth the money?

With a full kitchen renovation, homeowners can recoup about 59% of the cost, and a new master suite will generally return 50%, according to a study by the National Association of Realtors and the National Association of the Remodeling Industry. You're generally less likely to get your investment back the more you spend on a renovation. Basic home maintenance and smart upgrades, such as replacing your garage door or upgrading your home siding, will allow you to get the most out of it. Of course, your ROI drops to 0% if you plan to stay home forever.

Replacing vinyl siding with stone siding in a part of your home, such as a driveway, can improve the exterior of your home. The average cost estimate represents 36 linear feet of thresholds, 40 linear feet of corners and an address block, and materials including two layers of water-resistant barrier and corrosion-resistant slats and fasteners. This project can recover just over 92 percent of its cost. By far the most popular financing option for a top repair company is a renovation loan, either through a home equity line of credit or a mortgage.

NAR's “Joy Score” measures the satisfaction homeowners feel after completing a renovation project and enjoying their upgraded home. After all, people often make the decision to buy a home before they go through the front door, according to Bryan Sebring, owner of Sebring Design Build in Naperville, Illinois, who teaches workshops on home renovation. A large-scale renovation job can take many months, if not years, to complete, and if home prices drop or remain stable during that period, it is possible to leave at the end of the project with a house that is not worth investing. Talk to a real estate agent to find out how much your home is worth and how quickly it could sell, and to help you determine if what you're looking for is available in your price range elsewhere.

The compensation pays off for homeowners who dream of organizing numerous family gatherings, more space in the kitchen, a larger master bathroom or more space for hobbies. Certain home renovations offer a sizeable investment, often recovering 80% or more of their cost on resale, including complete kitchen renovations, upgraded hardwood floors and bathrooms, as well as ceilings, siding, doors, windows, and energy upgrades. Among the structural and cosmetic renovations are the main additions needed to align the house with its neighbors, such as a family room or a third bedroom in a community of three-bedroom houses. While the best home renovations for resale can be expensive, the good news is that there are several ways to pay for them.

And before the value of renovations can be considered, investors need to make sure that any new additions fit into the existing space, something that the best home design software can help with. Then subtract that from the likely market value of the home after renovation, drawn from comparable housing prices in the neighborhood. So, as you review your long to-do list, you'll need to decide if the benefits outweigh the time and money involved in renovating a home.

Alejandro Neidenbach
Alejandro Neidenbach

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