Finance Blog

Make the Most of Your Home Improvement Projects

Written by Ilyce Glink on April 24, 2012 in Real Estate  |   3 comments

Whether you’re sick of your laminate countertops or you just want to spruce up your bathroom, you might want to consider whether your remodeling projects will yield much money when you’re ready to take the steps toward selling your home. With housing prices continuing to…

Whether you’re sick of your laminate countertops or you just want to spruce up your bathroom, you might want to consider whether your remodeling projects will yield much money when you’re ready to take the steps toward selling your home.

With housing prices continuing to decline, it’s important to think about the return on investment of renovation projects—and to then find ways to maximize your investment.

“Aside from making sure a house is structurally sound, things that are usually very important to a potential buyer are going to be the bathrooms and the kitchen,” says Brian Zeldes, a certified remodeler with BKZ Contractors in Philadelphia and spokesman for the National Association of the Remodeling Industry.

But in a cost-conscious market, those projects don’t offer the best return on investment, according to Remodeling magazine’s Cost vs. Value report for 2011-2012. Replacement projects—doors, windows, roofing, or siding—will increase the value of your home while often carrying lower price tags.

Midscale renovations are where the best investment lies in interior remodeling. In a kitchen, upgrades like refurbished cabinets, new countertops, a new coat of paint, bright lighting, and a clean floor will go farther than a complete overhaul, Zeldes says.

Avoid luxury items if you want to see your investment pay out when you sell. Having top-of-the line appliances or a pot filler faucet may be worthwhile for you, but few buyers will be willing to pay extra for your pet projects. Instead, focus on your market. In an area where outdoor living spaces are the norm, for example, adding a backyard deck can go much farther than a kitchen upgrade.

If you’re looking to remodel and are thinking about selling your home soon or sometime in the future, try these projects for the best return on your investment.

1. Replacement projects. These are not flashy, but they are cost-effective and have an above average cost-value ratio of 71.6 percent. Replacing your front door or installing a new garage door are two of the least expensive repairs, but they ramp up curb appeal and can both increase security and save on heating and cooling costs. Even better, they can carry a return on investment anywhere from 80 to 100 percent of the cost. Window and roofing replacements, especially with the addition of spray foam insulation, offer the same benefits, but at a slightly higher price tag, notes Zeldes.

2. Kitchen remodeling. Minor facelifts in the kitchen—like new cabinets or a replacement countertop—can go a long way toward improving the resale value of your home. Limit these renovations to less than 20 percent of the total value of your home to maximize the value.

3. Adding a new space—without adding more house. By adding a deck, converting an attic to a bedroom, or finishing a basement, you can add more livable space to your home without increasing its footprint. While these are some of the priciest home remodeling projects, they are also carry some of the highest returns of investment, topping 70 percent cost recouped. While a basement refurbishment could cost upwards of $45,000, a wood deck addition carries the lowest cost at around $7,000.

Signs of Life from a Struggling Real Estate Market
Buying a Home: Are You Ready?
Buying or Selling Your Home? Local Real Estate Markets
Buying or Selling Your Home? Real Estate Price Predictions

Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and at the Home Equity blog for CBS MoneyWatch.


  1. Karen Steed, Associate Broker, Haralson Realty says:

    Great tips Ilyce. Homeowners need to think about return on investment when doing upgrades and remodeling. If they decide to sell, some improvements will not have a payback.

  2. Ray Klebba says:

    Hi Illyce, Thanks for the handy tips. Hope you and your family are doing well. Best to all.

    Ray Klebba

  3. stone supplier says:

    Awesome blogging. Very nice tips for homeowners. Hope you will post some more blogs like this.Thanks for posting.

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