Home improvement projects are on the rise. More than half of homeowners are planning a home improvement project in 2018, with 45 percent planning to spend more than $5,000.1 While most people use savings to fund these projects, 30 percent plan to use credit cards and 13 percent plan to use a home equity line of credit (HELOC).1
Whether you are looking to sell and want to increase your home’s value or just want more enjoyment out of your home, remember that not all home improvement projects are created equal. Before you invest the time and money in a major home renovation, consider the return on investment (ROI). Many factors determine the ultimate ROI of specific projects, such as the value and attributes of other homes in your neighborhood, the housing market and the project’s overall quality. And remember: You can (and should) enjoy improvements while you’re in the house. Your family’s happiness is important, too.
Check out these common home improvements and see if they line up with your budget and your goals.
Projects with the best bang for your buck
Installing a wood deck is one example of how an exterior improvement can help boost curb appeal, which in turn can up your resale value. Plus, it can increase the “living” space of your home without the typically higher price tag of adding another room—which can cost an average of about $42,000.3
A minor kitchen remodel is one of the few projects for the interior of your home that has a high return on investment. By minor, we’re talking making changes like replacing the cabinet fronts and hardware, adding new energy-efficient appliances, replacing laminate countertops, adding a new sink and faucet and repainting trim.2
Outdoor fire pits and fireplaces are ranked as the most popular outdoor feature for 2018.5 Relaxing with your friends and family on a summer evening around a natural stone fire pit is likely to add joy to your life—and be worth the price of construction, even if you aren’t planning to sell your home.
Not all siding is created equal: Different types of siding have their own aesthetics, costs and maintenance requirements. For example, wood or brick siding may cost up to 25 percent more than stucco or vinyl due to material and labor costs.6 Vinyl is cheaper, more versatile and easy to maintain—it’s the most popular type of siding in the U.S. and makes a good candidate if you’re looking for a do-it-yourself option.
Projects that could end up costing you
Deciding whether it’s worth your dollars to install a pool may depend on where you live. It’s only likely to add value if you live in a warmer climate, most of the houses in your neighborhood have them and your yard is big enough for both a pool and additional play spaces. Remember to factor in the cost of maintenance and repairs, which could be several hundred dollars per year.8 Be sure to balance these costs against how much you’ll use and enjoy the pool.
Picture your dream kitchen. Does it include top-of-the-line custom cabinets, stone countertops with a glass tile backsplash, commercial-grade stove top and high-end tile flooring? If so, be sure to picture the price tag, too—it can add up, with a potential resale value of just more than half of what you put into it. A good idea to keep in mind when considering a remodel is that the project should cost no more than 15 percent of the current value of your home, since you’re unlikely to recoup a higher amount.3
In 2016, homeowners spent a total of $38.5 billion on bathroom remodels, with the most money going toward showers, flooring and vanities.9 In particular, people are looking to add bigger showers with high-end features like rainfall showerheads.10 Because the average shower installation can cost about $3,000, some of the common places people look to save money are on sinks, lighting and toilets.3, 10
Remember: Regardless of any cosmetic upgrades you want to make to your home, it’s essential to make sure you are keeping your home in functional working order. Keeping your home up to date and in good condition is just as important as having upscale remodeling. And despite any changes you make, new buyers may want their own style. Rather than going for broke (literally!) with a major remodel, focus on functionality and what suits your own taste.
2 “2018 Cost vs. Value Report,” 2018, Remodeling
3 “True Cost Guide,” 2018, HomeAdvisor
4 “2016 Remodeling Impact Report: Outdoor Features,” 2016, National Association of Realtors
5 “ASLA Survey: Demand High for Residential Landscapes with Sustainability and Active Living Elements,” April 3, 2018, American Society of Landscape Architects
6 “Siding Materials,” DIY Network
7 “Swimming Pools: Costs Vs. Long-Term Value,” Investopedia
8 “In-ground Swimming Pool Cost,” Fixr, 2017
9 “NKBA Study Finds Homeowners Spent More on K+B Products in 2016,” January 24, 2018, Remodeling
10 “2017 U.S. Houzz Bathroom Trends Study,” September 28, 2017, Houzz