Home Improvement by the Numbers
Save money with these wise investments in home improvement
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Remodeling can be a rewarding and expensive process, but the investment is worth it. New appliances will save you money on utilities, but a remodeled kitchen or the addition of a bedroom can increase the value of your home.
Because of the added value, you can often make back the money you spend. This is called the return on investment (ROI). But it's often hard to decide which projects will add value to your home and which projects will be a money pit.
Vinyl siding is popular because it is low maintenance and long lasting, and in neighborhoods where vinyl siding has become more common, shiny new siding can add value to your home. Vinyl siding can cost about $1 per square foot for do-it-yourself projects, but if you want the job professionally done, adding in the cost of a contractor can boost the price to about $7 per square foot. Depending on the size of your house, new siding may cost $3,000-$12,000. However, replacement siding can have an ROI of 88 percent. This is one of the best places to start remodeling since very few additions to you home offers such a high return on investment.
Replacing windows can greatly improve the look of a room, changing broken down, single pane windows for high-end double pane windows looks great and saves on heating bills.
Basic windows can cost $300 apiece, so for the average one story, ranch style home with 10 windows, your project could cost $3,000. Higher end windows with custom framing can cost up to $1,000. But don't let the sticker price shock you, new windows have an ROI of over 80%.
Replacing your roof is important to the life of your home, and is another option for making your money back on home improvements.
If your house has asphalt shingles, replacing a few shingles only costs about $100, replacing the whole roof can cost $100-$350 per 10x10 foot square patch. Wooden shingles cost about $150 for single area replacements, and $6,400-$13,500 for an average re-roofing project. Don't forget that it is much harder to sell a house with roof damage, and re-roofing has an ROI of 60 to 65 percent.
Natural Gas Furnaces
Natural gas furnaces can be up to 96% efficient, are cleaner burning, and are less harmful to the environment than other forms of heating. Installing a natural gas furnace that works with existing ductwork costs about $7,000, but a new furnace including ductwork can run nearly $15,000.
Based on the energy saved in utility bills, the ROI of a new furnace can be as low as 10% in the first year. However, if you consider resale value added to your home and/or the amount saved in utility bills over 5-10 years the ROI can be 100% or more.
Remodeling your kitchen can be the most rewarding and expensive remodeling project homeowners ever undertake. New countertops, new appliances, new cabinets can make your kitchen shine—the average cost for kitchen remodeling is $17,000, although larger kitchens remodels can run much higher than that.
However, the kitchen is a deciding factor for those looking to buy; a cramped, outdated kitchen can quickly sour a deal. Kitchen remodels, even the most expensive ones, have an approximate ROI of 70 to 80 percent. For example, a minor kitchen remodel in the $25,500 range can equate to an increase in your homes value of up to $17,500 or an ROI in the high 70% range.
If a full kitchen remodel still seems like too large a project, consider remodeling in small steps. Instead of all new cabinets, new cabinet hardware, for $2-$20/fixture, can be a good alternative. New Formica countertops are $300-$1,000 and easy-to-install, do-it-yourself options are available. These fixes carry the same ROI as full remodels.
The average cost of a bathroom remodeling project is $12,500, and if you're expanding a small bathroom and remodeling, costs can increase to $35,000 or more especially for an upscale bathroom remodel.
Like kitchens, a cramped or dingy bathroom can be a turn-off to potential buyers. This face-lift gives bathroom remodels an ROI of 78 percent.
Bathroom remodels can also be done in small steps. New linoleum for $100-$900, and new light fixtures for $2-$100 can really change the look of a room, and have an equal ROI to a completely new bathroom.
Painting the exterior of your home has the highest ROI of any home improvement project except for some high-efficiency furnace upgrades. Exterior paint can cost $25 per gallon, or up to double that for high-end paint. The average 3,000-square-foot home uses about 15 gallons of paint, which means your exterior painting project can cost anywhere from $375 to $1500. However, with an ROI of 90 percent, exterior painting is worth every penny invested.
Painting the interior of your home is quicker than painting the exterior, and is a faster way to increase the value of your home than a full room remodel. Interior paint costs $12-$50 per gallon, so enough paint for one room costs roughly $25-$100. Factor in rollers, brushes, and drop clothes, and the project may cost $300, or double that if you hire someone to do the job. Interior painting has an ROI about 75 percent.
Adding one more bedroom or bathroom to your home than other neighborhood houses can make your home more lucrative to buyers, and if your home has less, an addition may be critical to selling your home.
The most common additions include adding an extra story, a new room, or an additional bathroom with high-end appliances. The good news is that a bathroom addition has an ROI of 66 percent. Consider other possible additions for your house such as adding a new deck, all-purpose family room, master bedroom with walk-in closets, or a full, two-story addition to your home, with an upstairs bathroom. Although more expensive, all these home remodeling projects have ROIs between 80 to 90 percent.
Home Improvement: The Bottom Line
Home improvement projects not only update the look of your house, but can add value and make you money as well. In any home improvement project, it is important to follow the 15% rule on home improvements—do not invest more than 15% of your home's value into any home project. With this information under your belt, your home improvement project can be a great investment.