Whether you are trying to sell your home or looking to add value to it long-term, home upgrades can be a great option. You will, of course, want to weigh the up front cost of such projects against the increase in value they provide. Evaluating the ROI on a potential project can help you determine which upgrades are worth it, and which are better left alone.
What Is ROI?
ROI stands for “return on investment.” In general, it is a measure of an investment’s profitability. In real estate, it is used to describe the dollar amount recouped after a renovation or upgrade.
ROI is expressed as a percentage. You can calculate an ROI for a specific undertaking by dividing net profits or losses by the initial cost.
Home Projects With the Highest ROI
Not all home upgrades are a worthy investment. However, the following projects tend to have a fairly high ROI and are worth considering if you are looking to make any updates:
1. Replace the Garage Door
The garage door is a focal point of your home. If it appears dingy, outdated, or in otherwise poor condition, replacing it is almost always a good investment. If you don’t want to replace the door, at least consider a good power washing and a fresh coat of paint.
Trends for garage doors in 2022 include brighter colors, wooden materials, and vertical window panels to let in more natural light.
Average Cost: $3907
Average ROI: 94 percent
2. Build a Deck
This is another fairly simple upgrade with a good ROI. People are spending more and more time at home, and a great outdoor space is a huge selling point. Natural woods like cedar and redwood have the highest return on investment, but composite decks are also a good option.
Consider including built-in seating, railings, and planters to match the natural wood.
3. Add Stone Veneer Cladding
Cladding involves a layer of material affixed to the exterior of the home to provide both insulation and curb appeal. It is an easy way to freshen the home’s outward appearance or update an old-fashioned aesthetic.
Any cladding will add value to the home, but stone veneer is the best investment for 2022. Other options include composite, metal, brick, vinyl, and wood.
Average Cost: $10,386
Average ROI: 92 percent
4. Replace Old Windows
Windows play a major role in your home’s curb appeal. If they are outdated, cracked, hard to open and close, or have lost their insulating abilities, it is time to upgrade.
In 2022, energy-efficient windows are a big plus. Even if you are not looking to sell, upgrading to more efficient windows will provide better temperature regulation and help you save money on utilities in the long run.
Average Cost: $19,385
Average ROI: 69 percent
5. Replace the Front Door
If your door is older or in need of repairs, consider replacing it. Like the garage, the front door will help form the first impression for potential buyers. Steel doors, in particular, have become increasingly popular for their aesthetic, ease of maintenance, and security benefits. Solid wood doors are also a classic option, although they do not offer the same ROI as steel ones.
Average Cost: between $500 and $1230
Average ROI: 65 percent
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