April 24, 2024

4 Home Improvement Projects with High Long-Term Return

When you’re making improvements to your home, you’re not just making your life better in the short term; you’re also making an investment in your future. Ideally, the value your home gains should be more than what you spend on improvements, but that’s not always the case. The best home improvements usually don’t pay off immediately.

It takes years for your home’s value to catch up with what you’ve spent on improvements. If you’re looking for an investment, putting your money in a certificate or other long-term investment will give you better returns. But when you’re making home improvements, you’re looking for ways to improve your quality of life without spending too much.

Calculating the ROI from your improvements can be difficult because the data is based on national averages. For example, in drought-afflicted parts of the country, water-efficient fixtures, rainwater collection facilities, and low-water landscaping will pay long-term dividends. In places with lots of solar exposure and high utility costs, solar panels will make your home more cost-efficient and attractive to buyers. No one will pay more for a well air-conditioned house in Alaska! Keeping that in mind, finding out what works for your market therefore depends a lot on trends and local conditions.

There is some good news if you’re looking for more universal approaches for getting the best increase in value for your home improvement dollar. Look for improvements that don’t cost much to start with and don’t need a lot of upkeep.

Here are four home remodel projects that can improve the resale value of your home. They’re excellent uses for your Home Equity Loan and you may be able to save money by doing part or all of them yourself! Be sure to consult your tax adviser to determine if these improvements apply for tax deductions.

Replace the Front Door

There’s a saying in real estate that suggests the features get tours, but the front porch gets sales. Why not start your home remodeling project with the first thing you interact with in your house: the front door. Upgrading an old, poorly fitting front door with a newer energy-efficient model is a cheap, quick project that can instantly improve your home’s efficiency and aesthetic appeal. Best of all, hanging a door can be done in an afternoon!

With an average price of just over $1,200, including labor, an energy-efficient front door has an ROI of 98%! It’s also a chance to be creative. A new front door can add a splash of color, and window placements can break up a monotonous front profile.

Minor Kitchen Remodels

Replacing major appliances and installing new flooring is a difficult, time-consuming, and expensive task. Being without a kitchen for weeks on end, and the number of professionals needed to install new lighting and other features can be a nightmare. The national average for spending here is $57,000, and the ROI for major kitchen remodeling isn’t great, at only 68%.

Minor kitchen upgrades, like new cabinets, counter-tops and energy-efficient cook-tops, are comparatively inexpensive. The average spending is just under $20,000 with an estimated return on investment at an impressive 80%. Just like with the front door, the changes are mostly aesthetic. People perceive a more modern-looking kitchen as being a better fit than a more “retro” look.

This is also a chance to customize a place where you spend a remarkable amount of time. Having a kitchen laid out just the way you like can make it easier and more enjoyable to cook.

Wooden Decks

Outdoor space is one of the hallmarks of the current iteration of the American dream. Where else can a family sit and enjoy a frosty lemonade on a hot summer day? Watch the kids play in the yard while tending the grill on a beautiful wooden deck!

The average cost, based upon a 16 foot by 20-foot wooden deck, is $12,000. The average return on investment is just over 80%. This is because of the perception of expanded living space at a reasonable price. Adding a deck costs about $40 per square foot, while a square foot of inside space costs an average of $90! Decks are a great way to increase the play space for a modest cost.

Bear in mind that, just like the air conditioning in Alaska, a deck in a climate where it is inhospitable outdoors for much of the year will not have as much value as one in more temperate climates.

Convert an Attic Space into a Bedroom

For most houses, the attic is an afterthought. Consider turning that abandoned space into living space with a remodeling project! Turning an existing attic space into a spare bedroom or office, complete with its own bathroom, can be done for a slightly steeper price. Nationally, the average cost is just over $50,000. That includes constructing a room, extending utilities to it, and adjusting the exterior of the house to accommodate the new space.

This remodel provides a 77% return on investment in resale value, with the potential for more. If you have adult children or relatives visiting from out of town, an attic room can be a wonderful guest room. You could also rent it out for additional income!

Improving your home is not just about making it look better; it’s about making it work better for you and adding value for the future. While some improvements may not pay off immediately, the right ones can enhance your quality of life and boost your home’s resale value down the line. By investing wisely in your home, you’re not only creating a more comfortable living environment for yourself but also building equity for the future. If you’re interested in applying for a home equity loan, or have questions, contact Interior Federal today!

Interior Federal is an Equal Housing Lender.

Related Content: What to Know About Home Equity Loans

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