Selling Your Home in 2020? These Improvements Will Add the Most to Your Sales Profits
If you’re thinking of selling your house this year, then it’s probably time to consider making some improvements.
Obviously, you should repair any glaring problems and address any safety or health concerns. Those can both ding your sales price (not to mention your home’s marketability) considerably.
In addition to these repairs, though, a few upgrades and renovations might also be smart — especially if you want to max out those profits.
Which projects should you focus on and which ones just aren’t worth it? The recent Cost vs. Value Report from Remodeling magazine sheds some light on the matter. Let’s look at the best and worst projects for your cash below.
High-ROI Home Improvements to Consider
There are two things you need to think about when choosing a pre-sale upgrade or renovation. First, will it make your property more marketable? More attractive to buyers? Look better in photographs? If so, you’re off on the right foot.
Next, you need to consider ROI. How much the project potentially adds to your sales price is certainly important, but so is the initial cost of the improvements. If you’re spending $100,000 on a project, just to get $30,000 back, it’s not a very wise use of your time or dollars.
Fortunately, Remodeling releases annual data that breaks down the highest-ROI home improvements. According to their just-released 2020 report, stone veneer siding is this year’s best bang for your buck. Let’s look at the numbers for this project, as well as the others in the top 10:
Stone veneer siding
- Average cost: $9,357
- Cost recouped: 95.6%
- Amount added to resale price: $8,943
Garage door replacement
- Average cost: $3,695
- Cost recouped: 94.5%
- Amount added to resale price: $3,491
Minor kitchen remodel
- Average cost: $23,452
- Cost recouped: 77.6%
- Amount added to resale price: $18,206
- Average cost: $17,008
- Cost recouped: 77.6%
- Amount added to resale price: $13,195
- Average cost: $14,359
- Cost recouped: 74.7%
- Amount added to resale price: $10,731
Wood deck addition
- Average cost: $14,360
- Cost recouped: 72.1%
- Amount added to resale price: $12,761
Wood window replacement
- Average cost: $21,495
- Cost recouped: 68.9%
- Amount added to resale price: $14,804
Steel entry door replacement
- Average cost: $1,881
- Cost recouped: 68.8%
- Amount added to resale price: $1,294
Composite deck addition
- Average cost: $19,856
- Cost recouped: 66.8%
- Amount added to resale price: $13,257
Roof replacement (asphalt shingles)
- Average cost: $24,700
- Cost recouped: 65.9%
- Amount added to resale price: $16,287
Projects That Just Aren’t Worth the Cost
It might seem like adding an entire new room or doing a full-out, major remodel of your kitchen or bathroom would be a great way to add to your bottom line, but according to the data, there are better things you could do with your cash.
According to Remodeling, the absolute worst investment you can make is an upscale master suite addition. The project clocks in with an average cost of over $282,000, but offers just $145,000 upon resale. Though that’s the highest amount added to a home’s resale value out of all the projects analyzed, it’s a mere 51.6% return on your investment — the lowest ROI on the entire list
Here’s a look at the worst projects you can spend on if you’re planning to sell your home:
Upscale master suite addition
- Average cost: $282,062
- Cost recouped: 51.6%
- Amount added to resale price: $145,486
Fiberglass grand entrance
- Average cost: $9,254
- Cost recouped: 53.3%
- Amount added to resale price: $4,930
Major, upscale kitchen remodel
- Average cost: $135,547
- Cost recouped: 53.9%
- Amount added to resale price: $72,983
- Average cost: $49,598 (midrange) to $91,287 (upscale)
- Cost recouped: 54% to 54.7%
- Amount added to resale price: $26,807 to $49,961
Upscale bathroom remodel
- Average cost: $67,106
- Cost recouped: 56.6%
- Amount added to resale price: $37,995
Before You Start Remodeling
If you’re going to make some renovations before listing your house, the above data can point you in the right direction. But before you even begin thinking of upgrading or remodeling your home, make sure you’ve addressed any necessary repairs first.
Consider getting a pre-listing inspection to help you identify any defects that might be at work in the home (and the lot it sits on). These issues would likely come out in the buyer’s inspection anyway, so doing this allows you to get ahead — ensuring a smoother sales process and, just maybe, higher profits to boot.
Once you’re ready to remodel, make sure to talk to your real estate agent, too. Trends can vary regionally, and they may have insights into which projects are best for buyers in your specific area. (They may also know which ones to steer clear of).
Paying for Your Renovations
Are you interested in updating your property but just don’t have the available cash to do it? Then you might consider a cash-out refinance. Refinancing may help free up some money and, given today’s historically low interest rates, it might even qualify you for a lower rate on your loan (and monthly payment), too.
Do you want to learn more about your refinancing options? Then get in touch with Embrace Home Loans today. Our expert loan officers are here to help.