Though there’s been a leveling off in home prices in most parts of the nation, putting big bucks into home improvements these days doesn’t pay off the way it did before the housing bubble burst. Before 2008 or so, home improvement projects were almost certain to bring in some profit for sellers but that has not been the case in recent years. The Equifax Finance Blog explores what home improvement projects do pay off in today’s recovering housing market in the recent article, “
Their results are based on the “2014 Cost vs. Value Report,” which is the latest installment of an annual study published jointly by Remodeling magazine and Realtor magazine. The study looks at more than 30 common home improvement projects, posts data on their average costs in markets nationwide, and makes projections on how much of their investment owners would likely recover when they sell their improved homes.
The five projects that yield the highest return on investment (ROI) nationwide are: entry door replacement, deck addition, attic bedroom addition, garage door replacement and minor kitchen remodel. But homeowners wouldn’t be making lots of money on these improvements, only entry door replacement is expected to break even (and just barely); for all of the others, homeowners would take a slight loss, when looking at the results at a nationwide level.
That doesn’t look very good for homeowners hoping to make a little bit of money back on their home improvements, but if you look at the results regionally and locally, it isn’t bad news for everyone in the U.S. Some markets will provide better returns. The article gives San Francisco as an example, where 177 percent of the cost of a deck addition would be recovered upon resale (nationally, 87 percent would be recovered). Of course not all areas will be as lucky as San Francisco.
The article reminds readers that some projects can be done by homeowners themselves to save money and get more back upon resale, provided you have the time and patience to do it yourself.
Read the full article and check out the helpful charts showing regional and local differences on the Equifax Finance blog. While you’re there, check out the wealth of articles on all kinds of personal finance topics, from retirement to credit to identity theft protection and more.