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Be sure to choose home improvement projects carefully, especially if your goal is to increase the value of your home to make it more appealing to prospective buyers. First, finish all basic maintenance before you put money into an extra project, such as adding a marble-tiled bathroom. If your roof is sagging and leaking, it doesn’t matter what your new deluxe bathroom looks like. Then, consider which projects will have the best return-on-investment (ROI). ROI is a percentage that rates the cost of the improvements against how much the improvements increase the value of your home in the eyes of buyers.
The average kitchen remodel with minor repairs such as painting and repairing fixtures and appliances is around $8,655. The return-on-investment, as a percentage, is 88 percent. This is a low-cost way to improve your home and get back most of your costs.
A typical bathroom remodel costs around $9,135, and the ROI is approximately 81 percent — another low cost improvement that adds to home value.
Adding a second-story addition onto your home is a major undertaking that requires a lot of time and effort, but the rewards are profitable as well. The average cost of a second-story addition is $73,553, with an ROI of 83 percent.
As a rule, improvements that increase the functional space of a home hold value longer than ones that just make a house look better. They also are significantly cheaper than adding an addition. For example, converting an attic into a bedroom usually costs about $35,960 and returns about 80 percent of its cost. A bathroom addition averages $13,918, with ROI of 81 percent. The average family room addition averages $30,960, with an ROI of 75 percent. A deck addition averages out at $8,022, with an ROI of 51 percent.
It’s commonly agreed that a swimming pool has no resale value. The main reason pools repel potential buyers is that they require expensive upkeep. Fear of liability runs a close second in limiting value.
These figures show that completing improvements to the kitchen and bathrooms of a house yield the greatest return on investment. One thing to keep in mind: Don’t make over-the-top home improvements just to keep up with your neighbors. Be certain when choosing home improvement projects that you are doing what’s best for the home’s value, as well as for you.
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Source: Debbie Temple, Ballard County Extension Agent for Family & Consumer Sciences