Home appreciation is happening at an exciting pace, and housing inventory across Denver continues to be limited. Because of these factors, some homeowners are choosing to remodel and renovate their current homes in advance of moving, to further increase the value of their investment in the midst of this hot marketplace. Many homeowners choose to remodel believing their improvements will increase the resale value of their home. While this is often true, certain types of renovations have greater impact on home values than others.
Harvard’s Joint Center for Housing Studies expects remodeling spending to reach $340 billion in 2018, up 7.5% year-over-year. According to Remodeling magazine, homeowners choosing to perform high-end interior remodels will see less of a return on investment than those who perform exterior practical remodels.
On average, homeowners who undertake an interior remodelling project will see an average return on investment of 56% of the cost of the remodel; as an example, if you complete a $10,000 iterior project, you can reasonably expect to see a sales price increase of $5,600 based on that expenditure.
Exterior improvements are worth even more. Homeowners who upgrade their homes with new garage doors or windows will see an average payback of 75% of the cost of the remodel. Some of the most profitable exterior changes include garage door replacement, wood deck additions, and manufactured stone veneer installations.
Minor kitchen remodels like updating appliances can earn a whopping 81% return, while major high-end kitchen remodels will yield just 59%. Design tastes differ, but almost everyone will appreciate new appliances and fixtures that are energy efficient or improve functionality.
Before undertaking any remodeling projects, consult a real estate professional. I’m happy to help you think through which improvements to make for a short term sale, or for long term planning. If you’re going to invest in your home, there are better choices than others, and it pays to be informed.
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