Makeovers on the House
With housing values at their lowest point in years, savvy homeowners who have the option are holding on to their houses rather than selling this year. It’s a great time, however, to make improvements to your house that will make it more valuable when housing prices recover.
The best home improvements are the ones that are most valued by potential homebuyers; in other words, they have a track record of increasing the selling price of your home. In a sense, these home improvements nearly pay for themselves when you sell your house.
Home improvements that give you the best return on investment are:
- A Bathroom. Studies show that an additional full bath can generate a 90 percent payback. The average national price for adding a bathroom is more than $21,000, but it can add nearly $19,000 on average to the sale price of your home. Renovating an existing bathroom costs considerably less, but still adds about 80 percent of that cost to your selling price.
- A Kitchen. Updating a kitchen generally offers a 90 percent payback – within reason. If you invest in top of the line materials and gourmet add-ons, you may not get that investment back. If there’s a chance you’ll be moving soon, you may want to stick to more basic upgrades: refacing the cabinets, new countertops, new flooring and better lighting.
- Central Air. Installing a central air conditioning system can provide you with a 75 percent payback. It’s one of the most commonly desired amenities among prospective homeowners.
- Green Technology. Another type of payback is the money you’ll save on your energy bill from remodeling. If you have very old appliances, for example, Energy Star appliances can pay for themselves over a period of just a few years. Energy-efficient replacement windows offer savings on your heating bill as well as an average 70 percent payback when you sell. The payback on photovoltaic solar panels is the subject of much debate, but there are monthly savings in addition to the benefit of reducing your dependency on fossil fuels.
More inexpensive but environmentally friendly updates include insulating your pipes and water heater or boiler, installing a programmable thermostat that turns down your heat at night, low-flow showerheads and toilets, installing flooring made of sustainable materials like cork, thermal window coverings, and painting with no-VOC (volatile organic compounds) paint.
Check out our how-to-go-green videos featuring Kahi Lee, interior designer on HGTV’s Design on a Dime program, on the SCOTT NaturalsTM Video Channel.
Home improvements that give you the worst return on investment are:
- An In-ground Pool. In some regions, an in-ground pool is a given. For most of the U.S. and Canada, though, if you add an in-ground pool, you can only expect to get 10 to 40 percent payback on your investment. Prospective buyers seem to be wary of the upkeep as well as the safety of young children.
- A Refinished Basement. Your family may get a lot of enjoyment out of a refinished basement rec room, but don’t expect to get more than 40 to 50 percent payback when you sell. The exception may be a high-end, lower-level retreat with a guest suite and entertainment area, especially if it has open access from the first floor and from the lower level to a backyard patio.
Question: What improvements have you made to your home, and how have they paid off?
