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Remodeling with a return on investment (ROI) in mind can be a smart strategy for homeowners, whether one is thinking about moving in the next few months or further down the road. Though this approach is an inexact science, in many instances, it’s savvy for homeowners to consider what buyers may want when planning home improvements.
Caitlyn Macrie is a licensed realtor-associate in Hammonton with Crowley and Carr and said she believes that exterior home renovations help add value to a homeowner’s property.
“Keeping a home well-maintained and updated will make a property appealing to buyers, and in return, the seller(s) can profit on renovations made to the home. Some examples of exterior renovations that could benefit homeowners when selling their home are roofing, siding and landscaping. These renovations provide a curb appeal that buyers look for,” Macrie said.
Homeowners may be surprised to learn which renovations garner the best ROI at resale. The home loan and refinancing company RenoFi indicates that overall home improvement projects provide a 70 percent ROI on average. Many high-ROI projects add functional space and improvement. The following are some exterior renovations that help homeowners recoup the most money at resale, according to Remodeling magazine’s “2022 Cost vs. Value Report.”
1. Garage Door Replacement: 93.3 percent recouped of $4,041 cost
2. Manufactured Stone Veneer: 91.4 percent recouped of $11,066 cost
3. Siding replacement (Fiber Cement): 68.3 percent recouped of $22,093 cost
4. Window replacement (Vinyl): 67.5 percent recouped of $20,482 cost
5. Siding replacement (Vinyl): 67.2 percent recouped of $18,662 cost
6. Window replacement (Wood): 66.3 percent recouped of $24,388 cost
7. Deck addition (Wood): 64.8 percent recouped of $19,248 cost
8. Entry Door Replacement (Steel): 63.8 percent recouped of $2,206 cost
The majority of renovations on Remodeling magazine’s list of the best investments are exterior renovations, making this area of a home a particular point of interest for homeowners.
The only interior project that cracked the Top 10 ROI for projects was a minor midrange kitchen remodel.
Real estate agent Dave Birnbaum with Re/Max Community believes that exterior renovations help build value to the home but it comes down to being strategic with the amount of renovations added as well as the comparables in the area.
“Any exterior renovation to a home will add value but if you add too much renovations, you’re never going to get the return back. If you list your house for $250,000 and then you put a $50,000 renovation to it and I get you $300,000, it’s the same thing. It just looks better on paper that your house sold for $300,000 rather than $250,000 but you just put out $50,000 cash, it’s the same exact number. You buy a house for $100,000 and you put $50,000 into it, you’re now in total $150,000 and if I get you $200,000, now you just made $50,000.
Depending on the comparables of the area, the exterior renovations are worth your time and energy but you need to be strategic of how much money you spend on your renovations,” Birnbaum said.
Exterior renovations perhaps add the most bang for your buck because they’re not only functional, but also because they add immediate curb appeal. Much in the way it has been said people eat with their eyes first—which is why chefs spend so much time on elaborate plating buyers will judge a property by how it looks when they arrive, even before they’ve stepped inside a home. In essence, home buyers often judge a book by its cover. A worn exterior may indicate to potential buyers that the home was not maintained, however false that assumption may be.
It’s important for homeowners to consider all factors before beginning a renovation. Certain projects offer a stronger return on investment than others, and that’s a significant consideration for homeowners who are thinking of selling their homes.
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