The 2015 Remodeling Magazine Cost vs. Value report identifies these top five mid-range exterior home renovations as beneficial investments that allow homeowners to recoup a substantial percentage of their investment when they resell their homes:
- Replacing the front door (steel 101.8 percent)
- Adding manufactured stone veneer (92.2 percent)
- Replacing the garage door (88.4 percent)
- Replacing the siding (vinyl 80.7 percent)
- Adding a deck (wood 80.5 percent)
The cost-value ratio compares resale value to construction cost. The higher the percentage, the more of the job costs you are likely to recoup when selling your home.
Budgeting for success
Once you’ve decided which replacement and remodeling projects will offer the best ROI, develop a schedule and a budget to ensure the home makeover remains financially sound. The budget defines the project’s scope, estimates overall costs, and helps to establish priorities. Generally, renovation costs should not exceed 30 percent of your home’s value and should be consistent with housing trends in your neighborhood.
What should the budget include? Consider these likely-to-occur expenses:
- Contractor costs. These include labor and may incorporate employee benefits, professional fees, permit and inspection charges and, of course, profit. Get at least three contractor estimates to ensure your contractor is cost-effective and reputable.
- DIY costs. Thinking of remodeling without a contractor? Keep in mind you will need to rent or buy power tools and equipment and potentially learn new skills.
- Hidden costs. For example, bringing outdated electrical or plumbing installations to code, or removing lead paint.
- Site preparation costs. For exterior renovations, this may include tree trimming, clearing land, and renting a haul-away container.
- Interim housing costs. If you plan to relocate, you will need living expenses for the project’s duration.
- Material cost. These include large expenses and small ones (ex. nails, trim) and could account for as much as half to 75 percent of the total cost. Factor in an extra 6-to-10 percent for waste for materials that are cut and fitted.
Bringing it home
If you’re interested in near-term resale value, it’s important to make sure that selling your home will at least recoup the cost of any completed projects. If you plan to stay in your home for many years, however, you’ll not only benefit from an improved resale value down the road, but you’re also more likely to appreciate the improved comfort and curb appeal in the meantime.
Courtesy of Brandpoint Content