20 Cost-Effective Home Improvements

Filed in Construction by on May 14, 2014

paintingAs a real estate appraiser, the question I am asked most often is “What will my home be worth if I do a specific home improvement?” This is an interesting questions since most home improvements are really maintenance issues, and it’s difficult to identify how a single home improvement will impact a home’s value.

Because I hear this questions so often, I quickly enrolled when I saw that Kaplan Educational Services was offering an appraiser/real estate agent continuing education course entitled “House: Twenty Cost-Effective Home Improvements.”

I do not agree with everything that was stated in the course, and I mostly disagree with the idea of telling homeowners or prospective buyers that home improvements will show a return on investment. However, the name of the course was “Twenty Cost-Effective Home Improvements,” and I can agree with that.

The question of home improvements really gets down to how a specific home improvement will impact the home’s value. Will a home increase in value enough to justify doing the home improvement? In my opinion, there are few, if any, home improvements that will show an even return on your investment, and there are even fewer that will increase the value of your home by more than the cost of the improvement.

I know that many of you will disagree, so let me clarify. Home improvements are costly if they are done by professionals, if all the correct permits are obtained and if they meet state building codes. As a do-it-yourselfer, you may be able to increase your home’s value at or above the cost of a home improvement project, but you are not accounting for labor costs.

Another aspect of home improvement return on investment is the condition of the item you are replacing. Your home and every component has an economic life. If the items you are replacing are at the end of their economic life, you will have a better chance of a return on your investment. But remember that if you are replacing windows, shingles, siding or floor coverings, then you already had these items, and they most likely had some economic life remaining. If you are remodeling only to suite your taste, you will not show a return.

According to Kaplan Educational Services, the 20 most cost-effective home improvements are as follows (in order from most to the least cost effective): 1. paint; 2. carpet; 3. vinyl; 4. countertops; 5. cabinet hardware; 6. sink/lavatory/faucet; 7. minor kitchen remodel; 8. bath update; 9. second bath; 10. fireplace; 11. major kitchen remodel; 12. front door replacement; 13. curb appeal landscaping; 14. family room addition; 15. adding central air conditioning; 16. windows; 17. larger garage; 18. exterior trim; 19. lighting; 20. decks.

I do not agree with everything on the list or the order of the improvements. I do not know how they would impact the value of your home or whether they will show a return on your investment, but give the list some thought if you’re planning to update your home. Some of the projects on the his list are included because they are relatively low-cost items that most do-it-yourselfers can handle, and that makes a lot of sense to me.

My grandfather always said that a person was either really lazy or really stupid if he didn’t put a fresh coat of paint on a house that he wanted to sell. This has stayed with me for years, and yes, Grandpa was talking about houses before low-maintenance siding products were popular. But that concept remains, and that is why paint is the No. 1 cost-effective home improvement.

Don’t forget, though, that some things do not have to make economic sense. Does a backyard pool make economic sense? Probably not, but it may add a great deal of enjoyment to your family’s life, and sometimes that is the only reason we need.

You home is an investment, and home improvements should help you maintain and even grow your investment. Just don’t count on a big return, and do things that you can enjoy.

As always, remember to measure twice, cut once and enjoy your home improvements.

by John Burns, a real estate appraiser and consultant for Lake and Home Magazine. 

Tags: , , , , ,