Home Improvement / October 11, 2018
Ask three seasoned home pros what they think is the best home improvement project for your money, and you’re likely to get three different answers. That’s because there’s no straightforward way to answer the question. There are just too many factors to consider, such as local home prices, current remodeling trends, the housing industry outlook, whether the home is to be put up for sale—we could go on and on.
On the most basic level, though, we believe the best home upgrade for your budget is the one that fulfills the three conditions below.
This list was put together based on our 25+ years of experience in home improvement, helped by real-world figures from an industry staple: Remodeling Magazine’s Cost vs. Value report. This annual study pulls in data from over a hundred U.S. markets in order to compare popular remodeling projects’ cost with the value they retain at resale.
By taking a look at what’s popular (what homeowners want/need) and how much they cost on average (what homeowners spend), we were able to get a good idea of which home upgrades should make the cut.
All Cost vs. Value figures shown are national averages. Regional figures vary, but the differences in trends across regions are minor in comparison.
For simplicity’s sake, we created budget groupings based on the estimates given in the report. These groupings span multiple home improvement categories and are not meant to reflect what is low-end, midrange or high-end within specific home improvement categories, e.g. window replacement.
The Cost vs. Value estimates do not include standalone surface-remodel projects, e.g. hardwood floor refinishing, wall painting, cabinet refacing. They also do not include do-it-yourself home upgrades; only paid outside labor is taken into account.
Lower-end projects tend to retain the highest percentage of their cost upon resale. This proves you don’t need an extensive budget to see excellent returns. They also often involve curb appeal or general exterior improvements.
Decks turn underutilized outdoor areas into valuable, customizable space without the high costs associated with other home additions. They add dimension to a yard, transform the way outdoor spaces are used and increase a home’s desirability to buyers.
Average recoup costs for wood decks aren’t as high as those for our runners-up, but the fact that they’re a more sought-after feature by a huge margin makes them our top pick.
Similar to deck addition, both of our low-end runners-up are curb appeal upgrades that will appeal to homeowners, realtors and homebuyers alike. These projects can be completed in a matter of days, which helps keep costs down.
Other honorable mentions in this category include siding replacement, vinyl window replacement and grand entrance cutting and reframing. These are function-driven upgrades that also have a significant impact on how a home looks from the outside—a twofer for your money!
Midrange projects are the happy medium in home improvement, with the price range allowing for plenty of flexibility. Kitchens and baths dominate this category. These upgrades are more finish- and material-intensive (not to mention more time- and labor-intensive) than low-end projects, but they also contribute a lot toward home comfort, utility and value.
For this category’s top pick, it’s important that we emphasize the word “minor”. Improvements to high-profile rooms like kitchens pay off, but we industry insiders have one crucial caveat: remodel for yourself rather than for potential buyers.
We’re seeing a tough market for homebuyers in 2018, with more people choosing to remodel rather than put their home on the market. So if you’re updating your kitchen with an eye on ROI, you may want to avoid a complete overhaul.
The same warning—to improve in moderation—holds true for bathrooms. Minor and midrange bathroom remodels tend to give bigger payoffs than full renovations. So why are these two still on the “popular” list? Simple: with more people opting to stay put, more homes need to be adapted for multi-generational/multi-family living or to support aging in place.
Roof replacement, wood window replacement and composite deck addition are also honorable mentions in the midrange category. You’d be hard-put to find a contractor who wouldn’t recommend a maintenance or add-on project at any price point. These are the types of upgrades that make sense to homeowners across the board, whether they’re looking to sell, buy or stay.
High-end projects depreciate the most upon resale. Their popularity is owed to more qualitative metrics, such as homeowner comfort and satisfaction. These upgrades prove that while cost is one of homeowners’ three basic considerations in remodeling, trends aren’t necessarily driven by ROI potential.
Here’s the cold, hard truth about big-ticket projects like this: in most markets, a $45,000 bathroom isn’t going to add $45,000 to your home’s value. These aren’t the types of upgrades realtors will advise paying for if you’re looking to sell. Big if!
If, however, you have money to spend and you know a new bathroom will improve your home’s livability, there’s no reason you shouldn’t give this project the thumbs up.
Like bathroom additions, major kitchen remodels and master suite additions are upgrades best suited to homeowners who want their homes to fit their changing needs. These projects are, for the most part, long-term commitments.
Our last category’s honorable mentions are also in the same vein: upscale bathroom and kitchen remodels, upscale bathroom and master suite additions, and midrange patio makeovers. What makes these improvements worth the money isn’t ROI; it’s quality of life.
To sum up, these are our top picks for each budget category. Each offers excellent payback in more ways than one.
If you want maximum impact for minimum expense, work on your home’s curb appeal. It’s a win-win-win for you, for realtors and for future homebuyers.
It’s not always about the payback! There will be projects where you’ll recover less than half your initial expense. That doesn’t mean they aren’t worth the money. If the upgrade improved your quality of life and overall satisfaction with your home, then it was money well spent.
A limited budget is not a problem. You just need to establish your priorities and communicate them well with your design team. Budget limitations can even become an avenue for creativity.