Remodeling, renovating and finishing home improvement projects are great ways to give your home a makeover, gain more space and allow your family to stay in your current home for a longer time. But will your planned project increase the value of your home?
Not all home improvement projects are created equal. Certain improvements add more resale value than others. Some projects lower your home insurance rates, while other projects actually increase your buildings insurance premiums. Here are a few of the home improvement projects that typically have the best financial impact, according to “Remodeling” magazine’s “Cost vs. Value Report” for 2011 and 2012.
Most real estate experts agree that if you plan on updating just one room in your home, make sure you update your kitchen. Large, open kitchens with ample workspace have become the social hub of modern homes.
A major kitchen renovation costing about $111,000 typically adds about $64,000 to the value of your home. Even just a few basic improvements can add to your home’s value, however. A minor kitchen remodel costs about $20,000 and adds about $14,000 to the value, which means that you recoup about 72% of the cost.
Kitchen improvement projects that really pay off include updating appliances, cabinets and flooring. Any updates that add workspace, including islands and extending countertops, are also financially sound projects. Make sure that you go with a more classic design and use high-quality materials to get the best bang for your buck.
Whether you’re upgrading an existing bathroom or adding another one, bathroom home improvement projects usually pay off for homeowners. A minor bathroom remodel that costs $16,500 adds another $10,200 to your home’s value, or about a 62% return on investment (ROI). Adding another full bath will run you about $76,000 and add around $40,000 to the property value for an approximate ROI of 53%.
Double vanities, separate showers and a separate room for the toilet are all modern features that today’s potential homebuyers seek. Updating tubs, toilets, counters and flooring also add to your home’s resale value.
Attic and Basement Conversions
As a general rule, home improvement projects that increase the functional space of a house add more value than just making cosmetic changes. Converting existing space into a new room is also far less expensive than adding an addition to your home.
Converting an unused attic into a bedroom can return upwards of 73% of its cost. Attic bedrooms run about $50,000 but add over $36,000 to your home’s value. Turning your basement into a bedroom or an entertainment room will set you back about $63,000, but add about $42,000 to your property value, or about 69% ROI.
Adding square footage and living space to a house is always a winning idea and building a sunroom can transform your entire home. Enjoy the sunshine during the day and have intimate get togethers at night. Adding a sunroom can cost you as much as $75,000 and adds about $34,000 to your home’s value, for an approximate 46% ROI.
Adding a garage to your home is an expensive endeavor, but the ROI can be good. Expect to spend at least $86,000 on a garage addition. You will add about $45,000 to the property value for an ROI of about 52%.
Keep in mind that although garage additions are a good idea, garage conversions are not. While people do enjoy added living space, they also like to park their cars inside of an enclosed garage.
Home improvement projects can affect your home insurance rates for the better or the worse. Updating old plumbing, electrical and heating systems could help lower your buildings insurance premiums because they reduce the chances that you’ll make a claim in the future. However, adding an in-ground swimming pool will add several hundred dollars a year to your buildings insurance rates.
Before deciding on a big home improvement project, take the time to obtain a home insurance quote that includes all of the home improvement projects you are planning.
Determine how much the project will increase the cost of your buildings insurance every year and multiply that rate by the number of years you plan to live in your home. Add that sum to the total amount of the estimated costs of your projects for the grand total and decide if your projects are worth it.
This article was written by James, who also writes for the best juicers 2016 reviews blog.