Home renovation activity has slowed down compared to the hectic pace during the pandemic, but homeowners are still focusing on investing in their homes, especially as the spring housing market begins to heat up. According to the 2024 Cost vs. Value report from Zonda Media, certain home improvement projects are now offering historically high returns on investment, with some upgrades averaging returns of nearly 200% for the first time ever.
Upgrade projects like garage door replacements and steel front doors are now offering an average return of 194% and 188%, respectively. These returns are almost double what they were last year, making them some of the highest return values in history. Instead of focusing on designer kitchens or luxurious bathroom remodels, the projects that offer the greatest returns in resale value are largely related to curb appeal, as revealed by Zonda’s report. In fact, nine out of the top 10 projects with the highest return on investment are exterior improvement projects.
When it comes to adding resale value to your home, exterior replacement projects are proving to be the most beneficial in today’s market. However, while these projects can significantly increase your home’s value, rising costs for construction labor and building materials mean that not all upgrades will provide a high return on investment. According to Clay DeKorne, chief editor of Zonda’s JLC Group, only three projects on Zonda’s list typically deliver a 100% return on investment, including garage door replacement, steel front door upgrades, and stone veneer installation.
Projects like minor kitchen remodels, which focus on tasks like painting and updating the backsplash, can provide high returns, with costs recouped at 96%. On the other hand, major upscale kitchen and bathroom remodels may not offer the same level of return, with only 38% and 45% respectively. This indicates that expensive upgrades to the kitchen may not necessarily pay off in terms of increasing the home’s value.
In today’s competitive housing market, sellers need to be strategic in their efforts to attract buyers willing to pay top dollar for their homes. While financing renovations with a home equity loan or line of credit may be more expensive due to recent rate hikes by the Federal Reserve, certain upgrades like a new garage door or entry door can make a significant difference. These simple upgrades can make your home stand out among the competition and potentially result in a higher selling price.
To maximize the return on your home renovation investment, it is essential to consult with a realtor in your area. They can provide valuable insight into specific renovations that may increase your home’s value and advise on which projects to skip. In some regions, investments like adding a pool can pay off significantly, while in others, they may not yield the desired results.
When it comes to renovating your home for maximum returns, exterior upgrades, strategic budgeting, and non-traditional enhancements can make a significant difference. By focusing on projects that offer the highest returns on investment and consulting with real estate professionals, you can ensure that your home renovation efforts yield the best results possible.