The Home Remodeling Projects That Will Earn You the Most Cash Back
Anyone who's ever watched Fixer Upper (read: everyone) likely has a mental laundry list of to-dos for their own households. A farmhouse sink would be nice, wouldn't it? And just imagine what Joanna would do with these floors.
But unless you're blessed with a visit from the reno king and queen themselves—or you have a whole lot of time, cash, and style smarts yourself–chances are a full-on house flip isn't in the cards. So if you have to choose between a bath remodel, a basement redo, or a brand new roof, what do you do?
One solution: Let your wallet decide. According to a new report from the National Association of Realtors, home remodeling projects can vary greatly in their return on investment, with some fixes recouping the entire cost of the renovation (and then some) and others falling way short. To compile the data, the NAR polled thousands of remodeling experts to determine the median cost of 20 different home projects, from a full-on kitchen renovation to replacing an HVAC system. They then tapped a panel of realtors to determine the amount of cash these upgraded features could add to a home's resale value.
Unfortunately for those dying for a farmhouse-style kitchen, the most lucrative upgrades weren't exactly the most glamorous. According to the report, if you want a renovation that'll pay for itself (with enough money left over for a down payment on a Caribbean vacation), you should really be thinking about a new roof. The exterior fix can fetch your home an extra $8,000 in resale value, and with a median cost of $7,500, that's an investment that's more than worth it.
Coming in just behind roofing is the somewhat more exciting addition of hardwood flooring, which will cost you $4,700 with a 106 percent return rate when you decide to you sell your home. In general, exterior upgrades have a tendency to pay off more than their interior counterparts—with the exception of flooring and the decidedly un-sexy replacements of insulation and HVAC.
Inside the home, popular renovation projects like upgrading a kitchen or master bath lose points largely because of the hefty costs involved. Simply upgrading a bathroom with new surfaces, materials, and appliances can set you back $35k with a 57 percent return rate; the kitchen runs a bit steeper with less of the value recovered (52 percent). Even worse on the ROI spectrum was a closet renovation, which recoups just 40 percent of its cost on average. (And contrary to what Sex and the City might have you believe, zero realtors reported that an upgraded closet has ever sealed the deal on a sale.)
But money, of course, can't buy happiness. And a new kitchen comes with a lot of it. According to the report, which also assigned each project a "Joy Score" based on a survey of thousands of homeowners, upgraded kitchens deliver a lot of post-renovation bliss, for an overall happiness factor of 9.7 out of 10. As for the closet? Remodeling satisfaction doesn't get any better—the project's Joy Score earned a perfect 10.
Gentlemen, you heard it here first.