So far in our 3 Part Home Improvement Series, we covered 6 Inexpensive Home Improvement Projects and explored ways to add value to your home with a small budget. But what if you’re thinking about investing a little more in your home? In Part 3, we will look at the best home improvement projects if you’re working with a bigger budget. (Remember to check out Part 1: 4 Tips for Choosing Home Improvement Projects before you get started on a big budget update!)
Note: Generally, I do NOT recommend large projects like a kitchen remodel or bathroom remodel simply to sell a home. The return on investment for these projects is usually not big enough. Smaller and less expensive updates in combination with good staging will generally have a great return!
Official list of the most bang for your home remodel buck:
Remodeling Magazine has researched the cost of 149 home improvement projects in more than 21 markets. Then they compared them to the perceived value of return by realtors in 100 US Markets.. In the 2018 Cost vs. Value report, the following projects had the greatest home resale value
1. Garage door replacement:
Cost of brand new installation: about $3400 (heavy duty garage door) with nearly 100% of cost recouped in a sale. If your garage door is still in good shape, you might actually get a greater bang for your buck by simply painting the garage door, and maybe adding some windows and hardware.
2. Manufactured stone veneer:
Replacing a section of the front facing facade of your home to give it an updated touch. 300 square feet will cost you about $8200 and will return you about 97% of that cost in the sale of your home.
3. Entry door replacement (steel):
The estimated cost is a proud $1400 and includes a 20 gauge steel door with clear dual-pane half-glass panel. The return was about 91%. Replacing an entry door does not necessarily need to be this expensive. Save yourself some money by simply repainting your door, adding new hardware and new exterior lights. Or do some research to get a good deal on a new door.
4. Deck addition:
Cost is estimated at roughly $10,000 with a 82% return. This sounds about right. If you live in Colorado, your summers are mild with minimal bugs- perfect for spending a lot of time outside. Therefore, enhancing your outdoor living space is a big plus for your quality of live with a notable return on investment. Remember to keep your wood stained at all times to keep the wood from decaying early.
5. Minor kitchen remodel:
As always, home buyers love a nice kitchen and bathroom. It only makes sense that this would bring a high return (estimated cost $21,000 and 81% return). Keep your kitchen remodel cost down by considering repainting cabinets, adding or replacing hardware, adding a backsplash, replacing counters, and adding new or used stainless steel appliances.
6. Replace siding:
It’s valued at $12,000 with a 76% return. Keep in mind that if your home is large, or you’re replacing siding with stucco, this cost could be significantly higher. Do your research and see if simply painting the exterior with popular colors might be more cost effective.
Further down the list, there is:
- Window replacement. This can be quite costly.
- Universal bathroom design. I cannot confirm that this is likely to increase home value
- Bathroom remodel. Always good ROI, but expensive.
- Roofing replacement. This is a must if the roof is in poor condition. A VA home buyer might not get financing if that is not in good order. Can you get your homeowners insurance to replace it?
Which home improvements add the most value in Colorado Springs?
Not all home improvements are created equal. Finished basements, home theaters and storage sheds don’t add as much value as you would think. What brings bigger bucks? The following list tend to have bigger impacts on your home value in the Colorado Springs market.
- Installing AC will add $2,000-4,000 in value.
- Adding above ground livable square footage will add $50+/ per square foot (depending on the market, neighborhood, etc.)
- A fireplace could add $3,000
- Garage space
- Decks and patios
Are home improvement tax deductible?
Yes and no. Depending on your financial and tax situation it may be deductible. If you are selling your primary residence, most likely it won’t make a difference. There may be a chance you can reduce your tax debt (ie. capital gains) if you are selling your home less than two years after your purchase. Be sure to save your receipts and invoices so you can give them to your tax professional in order to determine if it saves you money. Please consult your tax professional.