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5 remodeling projects with the highest return on investment

Date Published: Sep 13 2011

Millions of Americans are expected to remodel their homes this year as they wait out the return of a robust home selling market.

Angie’s List surveyed top remodelers and real estate professionals to determine which remodeling projects result in the best return on investment when it comes time to sell your home.

“Well-planned and executed home improvements make your house more livable while you live there, and they boost your home’s resale value,” says Angie Hicks, founder of Angie’s List, the nation's premier provider of consumer reviews on local service companies.

“If you’re investing in your home specifically to help sell it, focus your dollars on the things that will really wow a potential buyer.”

Home remodeling projects with the highest return on investment

  1. The kitchen – Whether it’s a major overhaul or a simple makeover, putting a fresh face on your kitchen is your best investment. Maximize your return by limiting your project cost to no more than 20 percent of the value of your home. Expect an 85 percent return on your investment.
  2. The bathroom – An outdated bathroom can spoil a sale. Current trends have homeowners installing large showers instead of garden tubs. A major update could cost less than $20,000, but it should yield an 80 percent return.
  3. Decks – A new deck can cost a few thousand to tens of thousands of dollars, depending on size and materials used. Before you build, look at other homes in your area and build accordingly. If the deck is in good shape, your return could be more than 80 percent.
  4. Siding – If your home’s facade is siding and it’s not in good shape, replacing or repairing the siding can bring instant freshness. You’ll likely spend at least $10,000, but you should get at least 80 percent back.
  5. Window replacement – The energy efficiency of new windows is a clear benefit to switching out older windows, but in some cases, it’s a safety feature, too.  Costs depend on the number of windows you’re replacing, of course, and the type. Expect a return on your investment of at least 70 percent.


“Don’t settle for a company without a great local reputation or references you can verify,” Hicks says. “Wait for the right contractor.”

Visit Angie’s List for consumer reviews on highly rated contractors, builders and other service professionals.

Comments

Submitted by G.B. Landrigan on Tue, 2012-02-07 14:10
As an Indianapolis Realtor for 26 years, I was very disappointed to see that Window Replacement was shown as one of the five remodeling projects with the highest return. It is not. For homes built prior to World War II (whether a mansion or bungalow), replacing the original windows often REDUCES the home's value. Those buying these homes are usually seeking something with charm, quality, and a certain "look." Windows are one of the key element of such a home and are uniquely proportionate and style to the architecture of the home. Almost (almost!) without exception, new windows strip this away. Buyers notice this, even if subconsciously. I agree that replacement windows for more recent homes or those beyond repair may very well be a good investment. But Angie's List needs to specify for which homes replacement is appropriate. Homeowners will unwittingly reduce the value of their homes. An article on window restoration/improvement (and its lower cost) would be timely.

Submitted by Shirley Halsey on Mon, 2012-02-13 09:20
Changing out windows in a older style house would change the look that can not be replaced with the new windows. I have a older home with tall fixed windows and have this problem with a little vapor in between the panes and installed cone blinds that works well for me

Submitted by Charles Barranger on Tue, 2012-02-07 14:10
How do I repair a muti deep cracked driveway located alongside a culvert and to the bact of my house. 49 yards of concrete required.

Submitted by matt on Tue, 2012-02-07 14:10
In the current market I don't think its wise to update with return on investment in mind. Update because its your home and you're updating it for you, not some faceless buyer in the future. The days of huge real estate profits are over. Bottom line is: do updates because you want them and make smart choices.

Submitted by Jim Warner on Tue, 2012-02-07 14:10
I was very surprised that Garage Door Replacement did not rank very high on your listing. All of the studies I have seen included the Garage Door right behind the Kitchen remodel as #2 in ROI because of the relatively low cost of replacing a Garage Door vs. all other remodel options. When you consider the significant curb appeal and great first impressions a new Garage Door can offer since it usually takes up a 1/4 or more of the front of the home, there is not another option on this list that can make a more drastic difference in how others view your entire home for the price. Good First Impressions are easily made at an affordable price with the many new modern Garage Door options available today. A bad first impression of the entire home can easily be made due to an old, damaged, or poorly maintained garage door. When you compare older non-wind loaded Garage Doors with a modern Garage Door that meets the new windload requirements in the latest building codes, the ROI can go even higer for homeowners since a non-windloaded Garage Door is the weakest most vunerable part of your home where roof and internal damage costs are very expensive once your Garage Door collapses. You may be able to get a reduction in your homeowners insurance costs with a new wind-loaded Garage Door that meets the latest Building Codes.

Submitted by chrisb on Tue, 2012-02-07 14:10
wow, a an actual semi-intelligent article from angies list.. well, there is a first for everything.

Submitted by Mary on Tue, 2012-02-07 14:10
Yes please, an article on window restoration/improvement would be very welcome asap! Lots of variables and priorities to consider when replacing wondows & doors eg New construction windows vs Insert replacement vs sash-pack replacement options. Also pros & cons of wood vs clad-wood vs vinyl vs fiberglass.

Submitted by M. Sabo on Tue, 2012-02-07 14:10
I am also surprised about the mention of replacing windows being a high return item. In our historic district, it is against code to replace original wood windows with plastic, etc. Those "big box" windows can actually decrease your home's value! There are many articles on the net teaching window restoration techniques...the windows work beautifully and look beautiful when restored. I have done window restorations myself, and it is not too difficult. Don't let a slick talking salesman sign you up for something you, your home, and your neighbors will regret. When they're gone, they're gone....

Submitted by Gman on Tue, 2012-02-07 14:10
Pay attention:all of these return less than 100%. That means that if you do it just to sell you'll LOSE money. Only do these remodels if you plan to enjoy them for a while. What remodels return more than 100%? Adding square footage is one. If the cost per sf for homes is higher than the construction cost you will make money.

Submitted by Lawrence on Tue, 2012-02-07 14:10
Need new AC TraneAC units

Submitted by Amir on Mon, 2012-02-13 09:07
"Limiting your project cost to no more than 20 percent of the value of your home" - could mean $200K, $300K kitchen renovations and more, for many NY Metro homes... Instead, I think it should be "value of your home's construction cost (not including land)". Also, in our area the return on investment many times exceeds 100% (!!!).

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