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The cost of remodeling a home is easier to stomach when homeowners can expect to recoup a sizable percentage of the costs of the renovation. While basing renovations on their potential impact on resale value may be unwise, return on investment is something homeowners must consider when mulling renovation projects.
Many homeowners wonder which renovations will resonate most strongly with potential buyers when a home is put up for sale. According to Remodeling magazine, homeowners are less likely to recoup their investment in a major kitchen or bathroom remodel than they would with basic home maintenance, such as new siding. That's because buyers are most interested in how the bones of the house - or those elements that keep the house protected and can be costly to fix - were maintained.
Each year Remodeling magazine issues its "Cost vs. Value Report," which highlights the projects that offer the most return on investment. In 2016, the No. 1 project was the installation of fiberglass attic insulation, which could produce 116.9 percent recouped cost and a resale value of $1,482. Rounding out the top five were manufactured stone veneer for the exterior, a standard new garage door, a steel entry door, and an upscale garage door.
Projects with the least return on investment tended to be more expensive undertakings that offered returns of roughly 57 percent. Such projects included bathroom additions, upscale bathroom additions, upscale master suite additions, upscale bathroom remodels, and deck additions.
For those considering more expensive renovations, keep these figures in mind, courtesy of Forbes.
There are even renovations that seem like good ideas but can actually hurt the resale value of a home. MSN Money lists these projects as money-wasters for those who want to sell soon.
Homeowners should investigate potential renovations before committing the time and money to something that may offer little value at resale.