4 home renovations with the highest ROI
You can’t go wrong with projects that are proven to have a high return on investment.
Of course, it’s your house. You have the freedom to change and improve your home any way you’d like. But many homeowners appreciate knowing that their money is well spent—that the home renovations they’ve taken on might bring some return if they sell their home in the future.
We’ve gathered data from the 2022 Remodeling.com Cost vs. Value Report* to save you from putting your money into projects that won’t yield much back. And if you do choose a low-return project, at least you’ll be making a fully informed decision. The sacrifice might be worth it for that outdoor shower you’ve had your eye on.
4 projects that won’t add much value when you sell
Low-return home renovations include*:
1. Additions.
Is it worth it to put in a bathroom or a master suite? It depends. Typically, the cost to build out a room can be high, while not providing the equivalent return on the money you spend. The Cost vs. Value Report ranks a bathroom addition as a lower-return reno, only recouping around 50 percent of the investment.*
2. Upscale remodels.
A fancy upgrade doesn’t necessarily a good investment make. While it can have great aesthetic appeal, the price tag on an upscale bathroom remodel may only yield around a 53 percent return.* An upscale kitchen remodel ranks even lower—again, because it’s hard to recoup the cost.* But there’s still something to be said for personal enjoyment. For many, cooking in a luxury kitchen may be worth the price.
3. Home maintenance projects.
Seasonal maintenance is one of the responsibilities that comes with homeownership. Projects like updating a furnace or replacing a roof aren’t optional; they need to be done to keep your home in good shape. Roof replacement ranks slightly above putting in a new bathroom, providing around a 55 to 60 percent ROI.
4. Midrange bathroom remodel.
Even when it’s not a luxury upgrade, a midrange bath remodel ranks at the lower end of the scale for ROI. Updating a bathroom’s toilet, bath, flooring, fixtures, and accessibility might only net a 57 to 59 percent return. However, replacing a toilet, faucet, and showerhead with eco-friendly fixtures could help you cut down on gallons of excess water consumption.
With an Academy all-in-one Renovation Loan, you can buy or refinance a home and get extra money to renovate it, all in one loan—one application, one closing, and one monthly payment.
Contact your local Academy Loan Officer for details.
4 projects that’ll give you a greater return on your investment
High-return home renovations include*:
1. New garage door.
A garage door replacement is one of the few home renovations that may net you just about equal to what you put in—around 93 percent.* The good news is that it’s not the most expensive upgrade. Replacing your garage door may cost an average of $4,041, recouping around $3,769. A new garage door helps to improve the curb appeal of your house and typically comes with a lifetime warranty.
2. Stone veneer.
Similarly, replacing vinyl siding with stone veneer is a fairly affordable project (comparatively speaking) that can net one of the highest returns. Installing manufactured stone veneer may cost an average of $11,066, providing a resale value of roughly $10,109. The total ROI is around 91 percent.
3. Minor kitchen remodel.
A minor kitchen update is one of the home renovations that comes to mind whenever you think of what to upgrade first. The kitchen is said to be the most important room in the house. It’s frequently used, and it’s a hub for socializing. A minor remodel, which includes replacing cabinet panels, drawer hardware, appliances, countertops, and flooring, could bring as much as a 71 percent ROI.*
4. Window replacement.
Putting in new vinyl or wood windows could yield a return of around 66 to 67 percent. If your windows are older, replacing them could bring a collection of benefits, beyond just adding to your home’s value. With updated locking mechanisms, new windows can help to strengthen home security. If you install energy-efficient windows, you might also see a payoff in lower utility costs.
For the most accurate information: Click into the Cost vs. Value Report and find where data is broken down by city. This will tell you how much the cost and ROI of a project may fluctuate based on your area. It can also be helpful to consult a real estate agent to see which home renovations local homebuyers are looking for.
Today’s homeowners have accumulated large amounts of equity**
Have you been thinking about renovating but don’t have enough cash? You could use a cash-out refinance to update, renovate, repair, or add on, leveraging your equity. If you put the cash-out proceeds toward a project that increases the value of your home, the mortgage interest is tax-deductible.† Connect with your local Academy Loan Officer to learn more about your options.
**CoreLogic, 2023. This is for informational and educational purposes only. †Please consult a tax professional about your specific situation and the tax savings benefits of homeownership. All mortgage products are subject to credit and property approval. Rates, program terms, and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Additional conditions, qualifications, and restrictions may apply. Please contact Academy Mortgage for more information. MAC1223-1484398.