The best reason to do a home renovation is to make your home more enjoyable and livable for you and your family. But the next-best reason is to improve your home’s resale value.
The annual Cost vs. Value report for 2023 by Remodeling looks at what value homeowners have recouped through home remodels once they sell the home. They average the national cost of each project versus the average resale value in our region to determine the ROI each renovation might net.
While it’s worth considering the amount you may recoup in the sale of your home, it’s also important to remember that you will be using the spaces in the here and now. So if a renovation “only” nets a 75% return on your cost, weigh that against how much personal value you got from the space. We’ll bet you will agree that the remodel was 100% worth the investment!
We all know how cumbersome a heavy, dated, poorly installed garage door can be – to say nothing of how much they negatively impact your home’s appearance. Homeowners are looking for garage doors installed in more modular sections. They also want them installed on heavy-duty tracks with motorized garage door openers (this study assumes you are reusing your old garage door opener; your return might be slightly lower if you need a new one). Still, getting your money back – and then some – ain’t bad!
Average Cost Recouped: 108.8%
Potential buyers’ first impression of your home is its exterior. Old, worn siding tends to give the impression that everything within is just as run-down; replacing the siding makes your whole home look refreshed. Buyers also love knowing it likely won’t need replacing any time soon. The type of siding you utilize matters, but the return average is between 80-100%!
In the Lexington market, buyers favor vinyl (103.5% cost recouped) and manufactured stone veneer (102%).
Real estate agents agree that, more than anything else, kitchens are what sell a house in our market. Completing a minor, mid-range remodel to your kitchen can increase the sellability of your home.
However, there does seem to be a point of diminishing returns with this remodel. In Lexington, the study showed that $25k kitchen remodels generally resulted in a 100% value return; $75k kitchen remodels dropped to 45% recouped for the homeowners. While a stunning kitchen will get potential buyers’ attention, what they’re willing to spend on a kitchen doesn’t increase by much. The study is clear: renovate your kitchen for your own enjoyment, but don’t expect a big return on a major overhaul. Still, a great kitchen is – almost – priceless.
Average Cost Recouped: 100.5%
Buyers love a home with curb appeal. Homeowners who remove their existing entry door and reframe the opening to accommodate a door with sidelights recoup most of their expense. Remodeling recommends utilizing a fiberglass door blank that matches the entry for the best return. If you’ve been thinking about upgrading your home’s entrance, this project is worth looking into!
Average Cost Recouped: 95.4%
Many homes rely on old, outdated furnaces. Converting your home’s system to an eco-friendly heat pump can mean lower utility bills and more enjoyment year-round (heat pumps also replace your air conditioner.)
In the Lexington market, this tends to result in a 76% return. While that may not sound like much, we’re assuming you’re most likely only going to replace this system when your existing furnace and/or air conditioning unit go kaput. You’ll get the rest of that value in personal enjoyment now, as well as some bonus savings on your electric or gas bill.
Average Cost Recouped: 76.3%
Outdated, leaking roofs are an item that you need to replace right away. So, aside from your own enjoyment of your home, what return will you see when you go to sell? On average, the resale value for asphalt shingles was highest, but metal roofing saw a 41.5% ROI.
Replacing old, worn roofing not only protects your home but also improves its overall appearance. Potential buyers will also love knowing that this isn’t something they’ll have to do in the near future.
Average Cost Recouped: 71.6%
Buyers love steel doors, as they are beautiful, sturdy and eco-friendly. While the phrase “steel door” may mentally conjure a bank vault or factory, these doors come in a variety of styles that can fit any décor. While the return was so-so in the central Kentucky market, the national average was a 100% ROI; we look for this number to trend upwards in our market in the coming years – get ahead of the trend!
Average Cost Recouped: 68.2%
If kitchens are what sell a home first, real estate agents agree that beautiful bathrooms help seal the deal in the central Kentucky market.
Much like kitchens, money spent on bathroom remodels can face a cliff of diminishing returns. This is another case where you should focus your remodel on creating a space you will truly love and enjoy.
Average Cost Recouped: 62.3%
Insulated windows are a renovation that can make all the difference in your enjoyment of your home, especially if your current windows already need replacing. From reducing noise to making your home more energy efficient, you will be glad you made the swap. Fortunately, this upgrade also has a decent ROI. Buyers in our market prefer vinyl windows, but wood windows still see a 56.7% return.
Average Cost Recouped: 63.8%
If your home doesn’t currently have a deck, adding one will certainly increase the fun-factor of your living space. While the cost recouped at sale isn’t among the highest on this list, it’s still worth considering this home upgrade. Buyers in our market seem to prefer wood decks, as the ROI falls to 38% for composite construction; that said, if you’re not selling anytime soon, the durability of composite materials may win out in terms of your own value over time. •
Average Cost Recouped: 53%
According to realtor.com, some kitchen updates are a better investment than others. They ranked some of the areas of a kitchen renovation that have the strongest chance of increasing a home’s resale value – as well as the ones that fall flat.
GOOD ROI: New Cabinets
What’s the first thing anyone notices when walking into a kitchen? The cabinets. They make or break the overall style and feel of the space. Because of the changing nature of kitchen trends, the style of your cabinets immediately reveals exactly when they were installed.
GOOD ROI: Increasing Counter Space
Buyers notice how much counter space a kitchen has – or doesn’t have. Experts agree that extra prep space is key when it comes to a kitchen’s value. If your kitchen lacks in surface area, try adding an island or extending a surface outward.
GOOD ROI: Skylight
Does your kitchen need a little oomph? Skylights bring in sunshine and help make the space look larger. Installation of a skylight typically yields more resale value than the expense!
GOOD ROI: Flooring
If your kitchen’s flooring is dated, aging or low-quality, replacing it can mean a big payoff. According to realtor.com, this can provide up to an 80% ROI.
BAD ROI: Overspending on Countertops
While replacing your countertops generally has a positive impact on the appearance – and your enjoyment – of the kitchen, the most expensive materials don’t always mean a good return.
BAD ROI: Funky Choices
While you should personalize your spaces to your tastes, every “out-there” choice is a potential turn-off for future buyers – especially in the kitchen.
BAD ROI: Luxuries
While your dream kitchen may include pricy bells and whistles like a built-in nugget ice maker, wine fridge and trash compactor, that doesn’t mean your home’s future buyer will be willing to pay for it. Absolutely get these luxe upgrades for your own enjoyment… just don’t expect them to pay off later.
