Guest Blogger: Will your Home Renovations Return a Positive ROI?

Guest Blogger #587, Entry #1355, July 1, 2012

It seems that the common misconception among homeowners is that irrespective of what home improvement or personalization project they perform, the value of the investment will be recuperated tenfold when they sell the house.

Far from it, because while certain home improvements will boost the real estate value of your residence and will partially reimburse their costs, most of them are fairly ineffective money-wise. To put it simply, you can expect the vast majority of improvements to return approximately 85% of the initial money spent at best! The singular exception to this rule comprises of adding a front door constructed from stainless steel, because the median ROI for this project is around 102%.

What improvements in your home will return a positive ROI?

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I would like to point out that this guide refers exclusively to home improvements that have the role of increasing the resale value of the property. Strictly speaking, if one (or more) of the renovation projects from the ones I’m about to discuss serve the purpose of making your residence more enjoyable and you can afford to allocate the budget for them, there is no reason why you shouldn’t execute it. When you do not plan to relocate anytime soon, I strongly advise you to customize and personalize your home just the way you like it. All I’m saying is that you shouldn’t expect their ROI to surpass your investment.

Without further ado, here are the projects that score lowest with respect to the return of investment.

Constructing a personal home office (where it applies) 

Working from home is one of the trends that continue to grow constantly, as outsourcing has become a financially viable solution for numerous enterprises. However, you should remember that this trend is still in its infancy and there are still numerous people that go to work every morning. Just look at the traffic jams and you will get the idea.

When you are looking for prospective buyers, your choices will be limited to people with this work style, because it is very unlikely that a person will be willing to invest extra in a convenience he does not utilize. In financial terms, home office investment will return less than 50% from the original sum spent.

Acquiring movable office furniture (chairs, solid desks, bookcases, etc.) would constitute a more reasonable alternative for those who work from home. These items can be transported to your next residence, so there is no need to purchase new ones when you decide it’s time to move.

Building sunrooms

Will a sun room addition be worth your money

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Yes, it is true that sunrooms have received a great deal of attention over the last few years and yes, it seems cool to have one. Even so, you cannot expect this project to return more than 51% from the original investment because to most it appears to be a waste of good space. Most people will prefer nurseries or guest rooms to a sunroom, due to obvious practical reasons.

If you want to enjoy the sunlight and have a place where you can relax on your off hours, then covered patios/decks are a considerably better choice. The lower initial costs and the higher return of investment recommend them to a sunroom any day!

Constructing a new bathroom  

Right, at first glance the fact that an additional bathroom is a bad investment may appear counterintuitive. After all, most people would prefer having more than one bathroom in their home, even if it is for emergency purposes only, wouldn’t they? As it turns out, you will not be able to recuperate over 60% from the investment in an additional bathroom and it is all because of the highly concentrated price per square footage.

This implies that while the new bathroom increases the desirability of your house, it will cost you A LOT to construct it. Think of piping, fixtures, approvals, drains, etc. In this case, the alternative is to upgrade the bathroom fixtures you already have with superior looking and functioning variants.

A bath improvement for your home can be worthwhile

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Expanding your current garage

You will not believe how much effort, money and time go into this type of project. And, considering that the single functionality of the garage is protecting your vehicle(s) from the elements or storing junk you don’t want lying around the house, you cannot expect a ROI higher than 62% at best. Instead of going to all that trouble to boost its size, you could do the following:

• Put on a fresh paint coating
• Winterize and insulate it
• Make good use of the available space by throwing away useless items.

Hello, I’m Chad and you can check out numerous great ways to improve your home by visiting www.superiorstoneandcabinet.com!

For more home selling tips on Stagetecture, click here.