What Home Improvement Projects Have the Best Return on Investment?
Hey everybody thanks for joining us today here on the real property show today. We’re going to talk about how if you are getting ready to sell your home or if you’re getting ready to possibly remodel your house and you want to figure out how to get the best return on investment for any improvements or repairs to the house prior to selling, or if you’re getting ready to remodel and you want to live there a while, what are some of the things you can do to make the house more enjoyable while you’re living there and be confident that you can get your money back when you go to sell your home.
Remodeling Magazine Cost Versus Value
I want to talk to you about that today and what are the best things you can do. There is some really good data out there, it’s put together by remodeling magazine, and if you search online for “Remodeling Magazine Cost Versus Value” and then type in the year, right now it’s 2022, but the data they have out currently is for 2021. So we’re going to look at today’s 2021 data and we’re going to look at it for the Boise, Idaho area. I’m going to show you how that compares to the national averages and how that would apply to the Boise Idaho area. It would apply to anywhere in the metro area, so that would apply to the Middleton area as well.
What Remodeling Magazine has done is they’ve broken the country into different segments like the Pacific, you’ve got the mountain range or mountain region, then the midwest, and you’ll see the east coast areas of how they’ve broken up the different sections of the cost. So you can see your national averages and then you’ll have your regional averages that we’re going to look at today.
Regional Return On Investment Data
The Boise, Idaho area falls into the mountain region, and we’ll look at that and see what improvements actually give you a better ROI when you spend the money to get the improvement done.
I’m going to share my screen right now and we’re going to look at this resource. You can find this by searching for Remodeling Magazine Cost Versus Value. You can see that this is for 2021, and it breaks it into the national data, it breaks it out by East North Central, East South Central, Mid-Atlantic Mountain, New England, Pacific, South Atlantic, West North, West North Central, and West South Central. So you can see as you hover over this map, you can see the different areas and what states are included.
What is the Remodel ROI for Boise, Idaho and Middleton, Idaho?
What we’re looking at today is the mountain region. Boise, Idaho is up in this area and we’ll look at that relates to the national averages. When you get to this page here, you can select the year, so you can say this is 2021 the most current data that they have and when you scroll down you can see the different types of projects. These are the most popular types of projects that are getting done and they are listed in the order of the most return on cost. You have your job cost which is here on the left column and that says this particular one the garage door replacement $3,907 and then you have your resale value of $3,663. So that’s a 93.8% recoup on your cost versus the value that you would get back when you go to sell. You won’t recoup a hundred percent which leaves you with some out-of-pocket costs but in this part, you are getting back a larger portion of your investment.
This particular garage door replacement is one of the best investments nationwide that are out there. What can also happen is you can get by doing these improvements to the front of the home you’re gonna see that these improvements on the front of the home that create the curb appeal are what really bring the best return on investment so when you’re going to sell a home, this house will sell a lot faster and for more money by doing these improvements so you not only get most of your money back out by doing some of these curb appeal improvements, you’re also going to get the home sold faster. A lot of people will go and look at a house from the outside and think, “wow that house really looks really nice, let’s go inside and make sure it works for our family.”
Why Do Home Curb Appeal Updates Help Sell a Home Faster?
They really buy from the street, and they can see they really like what they see from the outside, so it’s really important to look at this curb appeal. This is very apparent when you’re looking at track homes and you look at these production builders that are wanting to sell a home and they know how to build a home efficiently and cost-effectively and you can see that they put all the money on the front of the house. The front of the house may have really nice roof lines, it can have a lot of different exciting details on the front, a little bit of stone on the front looks really nice from the street, then you go on the sides and the rear of that house and it could be a perfect box with no detail on it whatsoever because they know that that front of that house sells the home more than anything and they can save the cost on the back side of the house so that’s really important to know as you’re looking through this data and figuring out what the best ROI is for what you’re going to get on your project.
ROI for Kitchen Remodels
So let’s look at the remaining of these items here so minor kitchen remodels, 72.2%, this is a huge thing too if you’re selling a house, updated kitchens are going to help it sell a lot faster and this is the average recouping costs when you go to resell. Siding replacement, window replacement, siding replacement-vinyl, window replacement-wood, as you keep coming down here, here’s replacing your roof about 60% ROI, a lot of people kind of just assume you should have a decent roof on it so that’s why you’re not getting as big of an ROI on these items.
Bathroom Remodels Return On Investment
Bathroom remodel mid-range is $24,000 national average, 60% Return On Investment. You come all the way down to the bottom and you’re looking at a bath or a master suite edition upscale, lots of costs to add on to a house, $320,976, but only $152,996 of the money recouped, that’s only 47.7%, so half of the money you put in this is strictly for enjoyment, and then you know the other half you’ll get back. So this is definitely something to look at, anytime you go upscale you get a lower ROI, and if you just do a mid-range you’re typically going to get a much higher return on investment. Regarding the finishes, if you load up the finishes making a lot of high-end finishes you typically do not get the ROI, the appraisers do not give that value to that property or to the improvement like they would if you just had a regular improvement on a standard level of finishes.
Comparing National Averages to Local Middleton, Idaho
This is national, now let’s take a look at the Boise Idaho area. We’ll click on this now and it takes us into this section here. So we have regional data and then it breaks it back down again into the regional data, for the mountain area we have Boise Idaho, Boulder Colorado, and Colorado Springs Colorado, and it hits another couple of markets here such as the Utah market. We’re going to click on Boise here, and clicking here is now going to give you the actual for your city. You can get the region down below, I skipped over that here just for the sake of time.
Looking at the Boise Idaho area, this is the same situation here, there’s a little bit different data though, you can see the garage door replacement is actually lower than the manufactured stone veneer, so it’s pretty close but this is what you’re seeing for the cost recouped. Actually, that’s 95% recouped and 92% is the national number for return on investment. See the national numbers are here and then your manufactured stone shows up higher. This is your national number here so this is how it compares to national and you’re looking at these orange numbers here are actually going to be your city location. So this is Boise Idaho, this is what it’s going to be, so look at your manufactured stone garage door replacement, and minor kitchen remodel.
You’re seeing 85% returns on investment for a kitchen remodel and it’s costing $24,000 to do. If you’re looking at a garage door replacement it’s $3,822 and a 94% ROI. Then here the actual you saw for the national average is 60.7% for your roof replacement, you’re actually going to see 69% here in the Boise Idaho area for this. So this is a really good idea too for you to look at the overall project cost if you’re trying to budget and figure out how to do a remodel, look at these before you start going out and talking to remodeling contractors and you can get a good idea if you’re going to be in the ballpark of cost. You’ll know if you can afford to do that project in your home. So this is the Boise, Idaho area and it really helps to see this.
Return On Investment Data for Interior Finishes
I want to show you the actual report, this is just a high-level report, which you can download right here, this download data for Boise Idaho, go inside here and it actually gives you this guide and this is partially what we have on our website with additional information, but the cool thing is it goes on here and it gives you the bathroom edition mid-range finishes. It’s going to give you the level of finishes, those are very important. It’s going to give you the type of project, such as what the actual description of this project is, so you’re going to look here and add a six-by-six or a six-by-eight foot bathroom over crawl space, with four concrete walls, use a cultured stone vanity top with a molded sink, standard chrome faucets, thirty-by-sixty inch. It’s going to go on and continue to describe what that project was.
Then you can see all of these different cities have the same projects and that way they can compare the different prices across the country. If you can see these first two pages, that’s all it has is the descriptions of the different projects so you have a good comparison you can figure out what you’re getting for the costs that are mentioned down below. So once you get through those first two pages and you scroll down, you must scroll through some advertisements on this first, but then it gets you down where you can see the actual city location. It’s kind of cool because it gives you a nice graph that displays the project type. This is actually not in the same order as ROI. I’m not sure how they actually put this in order, but this has bathroom edition mid-range so it does have the description project type right here, the job costs, resale value, and then the cost recoup.
Then it has the break out for the Boise area and it has the mountain area which is the region. That’s what we skipped over earlier and then it has the national averages so you can compare these across the board. For instance, here you can look at the job costs for Boise on this bathroom edition mid-range, it’s $48,619 whereas the mountain area is $53,462. So it’s a little bit cheaper than the mountain area. Furthermore, if you look at the national averages, it’s even higher at $56,046, so Boise is actually cheaper than the average mountain area and cheaper than the nation. You can look at that data all the way across the board here. You can go down each individual line item and each individual project and see what that looks like so it’s a really cool tool.
Best Home Renovation ROI
I really hope this helps if you’re evaluating if you want to do the improvements on your house to get ready to sell, or if you’re getting ready to do a remodel you’re going to sell later figuring out if you want to do it so you can enjoy it while you’re living there. Thanks for joining us today and I hope you have a great rest of your day.