For many Americans, a home is the biggest purchase and investment of their lives. As a homeowner, which upgrades not only pay for themselves in the long run but may put extra cash in your pocket?
Here are the top 10 tips for financially smart upgrades. The financial estimates are from Remodeling Magazine’s 2017 Cost vs. Value Report, or are linked to other home improvement and smart home sources.
1. Go Solar: Average Cost, three bedroom house: $14,700 (after Federal Tax Credit), Average Resale Value: $15 to $20,000, Average Cost Recouped: 100+ percent, electric bill significantly lowered – increase in home value varies based on system and location
If a homeowner receives the Federal Solar Investment Tax Credit (ITC), their cost per watt for solar power decreases 30 percent, bringing the average system cost of $20,400 down to approximately $14,700. The Lawrence Berkeley National Laboratory found that solar power can boost the value of your home by $15 to $20,000: about $20,000 in California and about $15,000 in other states. So, solar can provide homeowners with more than a 100% recoup on costs. Also, installing a residential solar system saves homeowners money by lowering the electric bill up to 99 percent, leaving only a small fixed charge for use of the grid.
If you are interested in going solar, PowerScout can provide you with a free, instant personalized assessment of your energy bill savings, home value appreciation, and the environmental impact associated with going solar. PowerScout can also connect you with certified local installation providers.
2. Up Your Landscaping Game: Average Cost: $5,000, Average Cost Recouped: 100 percent
The design and state of a home’s outdoor spaces can significantly improve or detract from its appeal. Paying for a designer and landscaping labor can cost around $5,000, but HGTV states 100 percent of those costs are recoupable. Trimming back overgrown shrubbery, adding a stone walkway or maintaining colorful plants near the entrance are a few possible outdoor improvements. Lavender or rosemary plants add a pleasant scent to a stroll through the yard. The National Gardening Association site conveys that an attractive and cared-for landscape can add 10 to 19 percent to the value of a home.
3. Upgrade Home for Energy Efficient Heating & Cooling: Cost and Money Recouped: Save hundreds annually, house value increases — varies based on upgrades and location — 90+ percent recoup possible
Energy Star, an Environmental Protection Agency (EPA) program that promotes energy efficiency, explains that heating and cooling often account for as much as half of your homes’ energy use. Using ENERGY STAR rated appliances and caring for and upgrading your HVAC system can save you money and increase your home’s value. ENERGY STAR equipment can cut your annual bill by more than $115. Carrying out routine HVAC upkeep like changing your filter monthly and getting a tuneup yearly are also important efficiency boosters. Sealing your heating and cooling ducts reduces energy loss as well.
Build it Green, an Oakland, California based nonprofit, shares a 2016 case-study in which a family spent about $20,000 on efficiency upgrades. They saved on annual energy costs, received a California rebate for the upgrade, and increased their home equity, bringing their net gain to about $18,000 — that’s about a 90 percent recoup on the original expenditure. One update they chose was to install a programmable thermostat, which can save homeowners about $180 annually. They also replaced the furnace, AC and ductwork. Keep in mind that a solar water heater can reduce hot water bills by up to 80 percent. The Federal Energy Management Program offers online calculators that can help you determine the potential cost savings for various energy-efficient products.
4. Remodel Your Kitchen: Average Cost: $21,000, Average Resale Value: $17,000, Average Cost Recouped: 80 percent
This is one of the most common upgrades recommended by real estate agents and with an average 80 percent recoup of expenses, can be a wise financial choice. A basic kitchen remodel is covered here, and a more major renovation is discussed in the kitchen appliances section. A basic or minor remodel covers cosmetic updates such as replacing cabinet fronts and hardware, repainting trim, installing a new sink and fixtures, and touching up or replacing wall and window coverings. Upgrading countertops, removing hanging cabinets to open up counter space, or adding a built-in bar or banquet are also popular options. The higher end of these renovations would include additions such as a new oven and fridge and/or an altered floorplan.
5. Refresh or Replace Siding or Exterior Paint: Replace Siding: Average Cost: $15,000, Average Resale Value: $11,000, Average Cost Recouped: 76 percent
Repainting or residing the outside of your home can have a major positive impact on its curb appeal. To reap the siding benefits listed above, be sure to include factory trim at all the house’s openings and corners.
The price of painting will vary depending on your house size; according to House Logic, painting a 3,000-square-foot home will cost you about $375 to $600 on paint and $1,500 to $3,000 on labor. Choosing neutral colors will appeal to the broadest spectrum of buyers. According to Business Insider, homes with a grayish-beige “greige” exterior can sell for $1,526 more on average. If your house may have been painted before 1978, lead testing is recommended. Painting the interior of a home can also add to its visual impact and appeal.
Pressure washing the exterior of the building is another way to freshen and improve its appearance. Power washers rent for about $75 per day and thoroughly washing your home can add up to $15,000 to the sale price.
6. Upgrade to Hardwood or Get New Carpet: Average Cost: Carpet replaced: $10 to $30 per square foot; Engineered hardwood: purchase for $3 to $5 per square foot, installation $3 to $10 per square foot, Resale & Recoup: increases home value, varies — up to 75 percent
When you sell your home, carpet should be professionally cleaned or replaced if it is aged. Some homeowners don’t like carpet because of the chemical processing procedures used to make it and its tendency to hold allergens. Removing the carpet and restoring the hardwood floors may be a more profitable investment, according to Forbes.
If you pull up your carpet to refinish wood floors, it’s best to have a professional handle the sanding and then you can stain and seal them yourself if you are so inclined. Hardwood floors have the highest return on investment, according to USA Today, which also reports 54 percent of homebuyers will pay more for hardwood. Other attractive options include high-quality laminate and or ceramic tile.
As part of a full living room update, HGTV puts the average resale value of floor updates at 40 percent. CBS reported flooring renovations could bring back a 75 percent payback in 2009.
7. Replace or Add Windows: Replace Wood Windows, Average Cost: $19,000, Average Resale Value: $14,000, Average Cost Recouped: 73 percent; Replace Vinyl Windows, Average Cost: $15,000, Average Resale Value: $11,000, Average Cost Recouped: 74 percent
Replacing or adding new windows to your home can boost its energy efficiency and give it a brighter interior. Window prices can range from around $100 to $2,000, depending on size and quality. Houzz explains window material costs run from low to high in this order: vinyl, aluminum, fiberglass, wood, composite and wood block. Types of windows generally from least to most expensive in this order: fixed, sliding, single or double hung, casement, awning and glass block. If you install energy-efficient windows, they will provide better insulation and cut your heating and cooling costs. They can also filter the sun’s rays to prevent fading to your belongings and prevent moisture from entering and giving your home a stale atmosphere.
8. Remodel Your Master Bathroom: Average Cost: $19,000, Average Resale Value: $12,000, Average Cost Recouped: 65 percent
As with the remodeling of any room, a master bath remodel can range from basic to high-end. A basic remodeling (priced above) does not change the floorplan of the room but may include a new ceramic tile floor or a new tub with an updated shower control. A vanity with an integrated sink and a built-in, recessed medicine cabinet can conserve space and add aesthetic appeal. An upscale remodel of the master bath might include contemporary features such as body-spray shower fixtures, double sinks and cabinets, heated floors, or a glass-enclosed steam shower.
9. Upgrade Kitchen Appliances: Average Cost: Major Kitchen Remodel: $62,000, Average Resale Value: $41,000, Average Cost Recouped: 65 percent
A full, high-end kitchen update will include new appliances like a built-in microwave, energy efficient range and dishwasher, ventilation system and garbage disposal. Stainless steel, slate, black, white and ivory are popular materials and finishes. Custom lighting and a floor plan expansion are other possible changes. Home Advisor shares these cost estimates on new major kitchen appliances:
High-End, Store-Bought: $300–$5,000
Custom Built-in: $1,000–$10,000.
10. Add a Patio: Average Cost: $52,000, Average Resale Value: $29,000, Average Cost Recouped: 55 percent
A patio gives homeowners an outdoor living and entertaining area that is highly customizable. It might be compact and cozy, with a shaded table and grill, or sprawling, with ample plush outdoor seating, potted trees and a gas-powered firepit. Evening lighting and awnings will increase the comfort of this fresh-air space. High-end models may include a full bar or an outdoor kitchen with a sink and mini-fridge.