May 27, 2024
The top home renovations that pay off at resale

Spring House Hunt

Remodeling magazine surveys 6,000+ real estate agents on what projects capture a buyer’s fancy and cash.

The top home renovations that pay off at resale
Deborah Katz and her brother inherited this three-bedroom town house in Chestnut Hill from their parents and invested $35,000 to update the home with minor kitchen and bath remodels. Their agent listed it and sold it within days for $81,000 over the asking price. Robert Umenhofer

Thinking of selling your home this spring? If you’re like most homeowners, you’re planning to do some sprucing up first, whether it’s simple cosmetic work like repainting or more substantial fix-ups like replacing cabinets or bathroom fixtures. But not so fast.

You may be surprised to learn that not all home improvement projects add value when you sell your house. To find out which add the most value for your remodeling buck, the annual “Cost vs. Value,” or CVV, report by Remodeling can be a great resource.

Every year, Remodeling publishes a report that compares the average cost for 22 popular remodeling projects with the value those projects yield at resale. The publication surveys more than 6,000 real estate agents across the nation, providing each with project descriptions, photos and illustrations, construction costs, and median home prices for their market and then asks how much value each project adds to the sales price of a home. The statistics released in 2024 reflect 2023 costs and values based on 2023 home sales.

The results are often surprising. This year, for example, the top-performing project nationally was a mid-range garage door replacement, which, at an average job cost of $4,513, adds $8,751 in value at sale, for a 194 percent return on investment.

The same project in Remodeling’s New England market — which includes the Boston, Burlington, Hartford, Conn., Portland, Maine, and Springfield metropolitan areas — yields a whopping 314.7 percent ROI, with an average job cost of $4,365 and $13,738 additional value at sale.

In fact, the four top-performing remodeling projects in New England this year were all exterior improvements, with steel door replacement, manufactured stone veneer, and fiber-cement siding replacement returning 236.2 percent, 151.7 percent, and 118.3 percent of the cost, respectively, upon the sale of the home.

Why are curb appeal projects such a good investment?

“When someone approaches a house that looks great from the outside, they are much more open to buying it,” said Clayton DeKorne, chief editor of JLC Group, which publishes Remodeling. “But think about the opposite condition — if you approach a home that obviously needs a paint job or a new roof, your mind is immediately thinking about the amount of money and work this house will take to fix. That’s not where you want a buyer as they walk through the door.”

The old adage “You don’t get a second chance to make a first impression” applies here, and that’s why curb appeal is so important to a prospective home buyer. The exterior of a home has a strong psychological effect on people, DeKorne said, and sets buyers’ expectations before they even walk through the door. If they start out with a strong first impression, they’re in a better frame of mind and more willing to pay a higher price as well, he said.

The top-performing interior project on Remodeling’s New England list this year, and the fifth overall, is a mid-range minor kitchen remodel, which would include refacing cabinets; replacing appliances with new energy-efficient models; installing new countertops; updating the flooring, sink, and faucet; and repainting. With an average job cost of $27,495, that project yields a 110.8 percent return.

“A minor kitchen remodel is the only project that has always been in the top 10,” DeKorne said. “Buyers want to walk into a kitchen they could live with for a year or two without having to spend more money to remodel.”

When Deborah Katz, a paralegal at a Westborough law firm, was getting ready to sell a three-bedroom town house in Chestnut Hill that she and her brother inherited from their parents in 2021, she knew the house needed to “be refreshed” first because her folks hadn’t kept up with routine maintenance.

The siblings’ agent, Debby Belt, a senior associate at Hammond Residential Real Estate in Chestnut Hill, suggested minor kitchen and bath remodels. Kitchen cabinets were refaced, the knobs replaced, fixtures and appliances upgraded, and new flooring installed, and the baths received new vanities and fixtures. Everything was painted. The result: The town house was listed in October 2021 for $999,000 and went under contract in three days in a no-contingency deal after a bidding war. It sold that November for $1.08 million, or $81,000 over the asking price.

The sellers had invested $35,000 for the upgrades.

“It was money well spent,” Katz said. “It was clean, looked great, and somebody could move right in. We did really well on the sale.”

The three-bedroom town house in Chestnut Hill that Deborah Katz and her brother inherited needed updating before it could be listed. Here, the kitchen cabinets were refaced, the knobs replaced, fixtures and appliances upgraded, room painted, and new flooring installed. The home sold within days for more than the $999,000 asking price.

Belt, the real estate agent, managed the renovation process on behalf of her clients. She said minor improvements will help sell most homes, except for those that are very old or “in atrocious shape,” where it may not make sense to do any work because the cost will be too high.

“Buyers don’t necessarily have imagination, so a house that looks like it needs a lot of work can be overwhelming,” she said. “But a house that you can spend a little bit of money on and get a big return is worthwhile.”

Of course, your results may vary. The return on investment of home improvement projects varies widely by home type, market, and even neighborhood. In a competitive seller’s market where there is little inventory and buyers are engaging in bidding wars just to put a house under contract, it may not be necessary to do any improvements and still receive maximum value because buyers will be likely to overlook an issue just to secure a home.

This is where an experienced local real estate agent can add enormous value. A local agent understands the market, the competition, and exactly what it will take to present your home in the best possible light to achieve maximum value when you sell.

“It was really important for me and my brother to trust the advice of our real estate agent,” said Katz. “She told us that if we do all the things she asked, we would do well. And she was 100 percent right.”

Robyn A. Friedman has been writing about real estate and the home market for more than two decades. Follow her @robynafriedman. Send comments to [email protected].