Homeowners are continuously looking for ways to increase the value of their homes, especially with the spring housing market heating up. While the frenzy of home renovation activity may have calmed down slightly compared to the pandemic era, there are still certain projects that offer the highest return on investment. According to the 2024 Cost vs. Value report from Zonda Media, garage door replacements now provide an average return of 194%, followed by upgrading to a steel front door at 188%. These numbers are almost double what they were last year, making these projects more appealing in terms of ROI.
When it comes to increasing the resale value of a home, it is essential to focus on exterior renovation projects. According to Zonda’s report, nine out of the top 10 projects with the highest ROI are related to exterior improvements rather than interior upgrades like designer kitchens or renovated bathrooms. Clay DeKorne, chief editor of Zonda’s JLC Group, emphasizes the significance of exterior replacement projects in adding value to a home. However, rising construction costs can limit the amount of return on investment that homeowners may receive.
Strategic Renovation Choices
While projects like a minor kitchen remodel can provide a return of 96% on costs recouped, major upscale kitchen and bathroom remodels may not have the same impact. It is important for sellers to be strategic in their renovation efforts to attract buyers willing to pay top dollar. Todd Tomalak, Zonda’s principal of building products research, suggests that a new garage door or entry door can make a significant difference in making a house stand out in a competitive market.
Financing Considerations
With the Federal Reserve implementing multiple rate hikes, financing renovations with a home equity loan or home equity line of credit has become more expensive. It is crucial for homeowners to weigh the costs associated with borrowing against the potential increase in property value from renovations. Understanding the financial implications of renovation projects can help homeowners make informed decisions about how to allocate their resources effectively.
Real estate professionals advise homeowners to consult with local realtors to determine which renovations are likely to increase the value of their homes. While some upgrades, like installing a pool, may pay off significantly in certain areas, others may not have the same impact. Angelica Ferguson VonDrak, an associate real estate broker, highlights the importance of “un-sexy” upgrades such as HVAC conversions, new roofs, or windows, which can have a substantial impact on a home’s value.
Maximizing Value Through Cleaning and Upgrades
In addition to renovation projects, a thorough cleaning and minor upgrades to furnishings can also contribute to enhancing a home’s appeal. VonDrak emphasizes the value of decluttering, updating furniture, and adding slipcovers to freshen up the space. By paying attention to both major renovation projects and smaller cosmetic enhancements, homeowners can maximize the value of their properties in a competitive real estate market.