Unless there’s a big market crash, you will almost always sell your home for more money than you bought it. But, inflation usually means that you won't be putting as much money back in your pocket as you think. Think about it this way. Let's say you purchase a home in 1998 for $140,000. In 2021, you would have to sell that home for $227,501 to break even according to a 62.5% inflation rate.
Making home improvements is the most strategic way to achieve that number and more, but the strategy is key here. Many people pour hundreds of thousands of dollars into home improvements and never recoup their investment. That’s not to say all home improvements are useless, though.
In addition to increasing the resale value of your home, certain improvements are necessary to guarantee your full enjoyment of your property. So what should you do? To ensure the highest rate of return, stick to the most strategic home improvements that walk the line between high ROI and your personal needs.
Let’s take a closer look at how much money you can really recoup from some of the most common and promising home improvements.
Having hardwood flooring is the best thing you can do for your home’s resale value. According to the National Association of Realtors’ 2019 Remodeling Impact Report, refinishing your hardwood floors recoups 100% of your investment, and installing new hardwood flooring recoups 106%.
While replacing your roof can take a hefty amount of money upfront, it will pay off when you sell your house. NAR revealed that the average roof replacement yields a 107% rate of return, especially if your house is 10-15 years old.
Manufactured Stone Veneer Siding
Stone is a big design trend right now everywhere from siding accents to fireplaces. Stone veneer is durable and requires less maintenance than wood or vinyl. According to the 2020 Cost vs. Value Mountain Region Report, on average, installing stone veneer siding recoups 100% of the investment!
Garage Door Replacement
Garage doors have undergone major aesthetic and technological innovations over the past decade. An upgraded garage door is attractive to buyers because it improves the look, efficiency, and security of a home. This is a great improvement for your peace of mind during your occupancy too. According to the Cost vs. Value Report, garage door replacements yield a 96.1% ROI.
Kitchen styles and appliance models change every year. If you've owned your house for 20 years and decide to sell it with the same kitchen as you bought it, you're going to have to dramatically decrease the list price to get showings. The buyers might even put in an offer and stipulate that you have to replace the appliances. The Cost vs. Value Report shows a 79.4% average rate of return for minor kitchen remodels in the Mountain Region.
Replacing your siding is a great way to increase curb appeal and increase your home’s durability. On average, fiber-cement siding has a 78.6% rate of return, and vinyl siding has a 74.4% rate of return.
A deck is an instant value-add to any home. It gives the illusion of more square footage and offers buyers a host of outdoor activities that they wouldn't have otherwise. When it comes time to show your home, stage the deck with outdoor patio furniture or nice dining furniture set to seal the deal. A deck addition typically recoups 70.6% of your investment.
Don’t Forget Curb Appeal
If these renovations are out of your price range or your sale is right around the corner, you can always focus on your home’s curb appeal instead. Little touches like mowing the lawn, trimming the trees, planting flowers, washing the siding, and cleaning the gutters make a big difference. Sprucing up the exterior of your home is minimally costly, and NAR says it guarantees a 100% return on your investment.
These Tips Will Help You Sell Your Colorado Home Faster
In a state like Colorado – where the weather is unpredictable and the real estate market is flourishing – home improvements are necessary for your enjoyment and to get a higher resale price.
If you're thinking about home improvements and don't know where to start, think about those that increase your home's curb appeal, durability, and security. These are attractive features for potential buyers.
Ask your friends, family members, and Colorado real estate agent about recommendations for home improvement professionals that will do a quality job.
It's also important to note that you do run the risk of over-improving your property some exclusive and overly personal home improvements can deduct value (I have a blog post on that!).