What are the best home improvement projects to undertake? It depends on your goals and plans. If you're trying to sell your property soon for the highest possible price, your priorities are likely somewhat different than if you're planning to stay for a few years and want to improve your family's quality of life.
If you're selling, focus on the renovations a buyer would be most likely to undertake, not those you're most itching to do. You might dream of putting French doors and a Juliet balcony in the master bedroom, but if your kitchen is twenty-five years old—or even fifteen—you're better off directing your home improvement dollars there. Buyers generally focus on kitchen and bathroom quality, along with overall living and storage space. Kitchen and bathroom remodeling projects are among the most disruptive undertakings, so buyers especially appreciate upgraded fixtures, appliances and décor in these rooms.
Here are ten worthwhile home improvement projects and the percentage of cost typically recouped at resale (in a seller's market):
1. Painting: If you're only going to do one thing, paint. Interior/exterior painting is one of the very few improvements on which you are likely to realize a profit—as long as you choose tasteful, current, neutral colours and the work is very professional. Payback: As much as 300%
2. Kitchen remodeling: Typically one of the most expensive improvement projects, and you can quickly run up a huge bill. Careful planning and shopping will help minimize costs here. When remodeling the kitchen, remember to keep the project in line with the style and quality of the rest of the house and neighbourhood. Just as there's no point in putting a pricey granite countertop on dated-looking 1970s cabinets, there's no point in installing a $50,000 kitchen in a $200,000 house. Payback: 68-120%.
3. Bathroom addition: If your home has only one bathroom and is meant to house more than two people, a bathroom addition should be one of your top priorities. If most homes in your neighbourhood have two, three or more bathrooms, and yours has just one or one-and-a-half, you will definitely increase your property value by adding a bath. Payback: 80-130%.
4. Bathroom remodeling: Upgrading a pokey bathroom will enhance the value of your home and add to your daily comfort and enjoyment. White porcelain is the safe, timeless choice here. Payback: 65-120%.
5. Finishing unfinished space: Whether it's an attic or a basement, by finishing these spaces you add significant value to your home, increasing square footage without having to build. Payback: 50-90%.
6. Window/door replacement: If your windows or doors are wasting energy or simply decrepit-looking, replacements can be an excellent use of your home improvement dollars. Stick to standard styles; odd shapes and highly customized arrangements do little for resale value. Payback: 50-90%.
7. Deck addition/improvement/expansion: Decks are one of the few exterior improvements with any significant return, apart from painting. Payback: 65-90%.
8. Additions of bedrooms, family rooms, sunrooms, conservatories, garages, etc.: Increasing square footage is almost always an excellent use of remodeling dollars, but don't expand your home so much that there's little outdoor space left. Payback: 50-83%.
9. Home office remodeling: This project is becoming increasingly popular. Be sure to plan for plenty of electrical and cable outlets to accommodate all the required machines and gadgets. Payback: 60-73%.
10. Energy efficiency retrofits: If your primary concern is return on investment, proceed with caution. Some retrofits, like better insulation and high-efficiency furnaces, pay for themselves relatively quickly. Others, like solar panels, heat recovery ventilators, and tankless water heaters, may take years to pay for themselves. Payback: Highly variable.
Two projects that are unlikely to pay off at resale: swimming pools (which may even adversely affect your property value) and excessive landscaping (buyers may admire it but few will pay extra tens of thousands even if that's what you spent to improve the grounds). And remember that badly done remodeling/renovation projects will cost you in two ways. You won't pay just for labour and materials; you'll pay when buyers see a project that has to be redone.