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Which home improvements retain their value

by Terri Gruca

Bio | Email | Follow: @TerriG_KVUE


Posted on October 16, 2011 at 11:00 PM

Updated Tuesday, Oct 18 at 2:26 PM

The other day I was talking with a photographer about whether he should remodel his kitchen. He worries about spending too much money because a neighbor of his fears they spent too much and won't get the money back. He’s not alone.

More people than ever are opting to improve their home instead of moving to a bigger, more updated one.

So here are some helpful guidelines from some reliable resources on what to spend your money on and where you’ll see the biggest return.

Angie’s List surveyed top remodelers and real estate professionals to this list of the top projects that result in the best return on investment. Few surprises here with kitchen and baths taking the lead, but it did find limiting your costs will help ensure you don’t over improve.

  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 The Bathroom – An outdated bathroom can spoil a sale.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.

Remodeling Magazine looks at the cost of remodeling homes across the country every year. It’s most recent survey for 2010-2011 shows that the downward trend in overall cost versus value ratio continues. It’s been on the decline since 2006.

In Austin the data shows that replacing the front door with a steel one gets you the biggest return on your investment (138.2 percent). Replacing your garage doors (94.5 percent) and a minor kitchen remodel (90.1 percent) remain among the best investments.

Consumer Reports has put together a guide and it provides some terrific resources on where to shop, how to plan and ways to save money on just about any kind of home improvement project.