real estate

The 6 home renovations that return the most at resale

Best return on your remodeling dollar
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Best return on your remodeling dollar | Sylvain Gaboury/Getty Images

Best return on your remodeling dollar

Trying to make your home "Flip or Flop"-worthy? Home renovations that return the most at resale aren't particularly sexy, but they can be.

The inaugural Remodeling Impact Report examines 20 home renovation projects, analyzing what they potentially return at resale. The report comes courtesy of the National Association of Realtors, or NAR, and the National Association of the Remodeling Industry, or NARI.

Some of the results are surprising.

"In the past, NARI data suggested that a complete kitchen remodel could recoup 75 percent to 80 percent (at resale)," says Steve Carasso, director of marketing and communications for NARI. But this report pegged the resale return at 67 percent, he adds.

That means kitchens didn't make the top six. Neither did bathroom remodels.

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So when your real estate agent gives you a list of suggestions to make your property more attractive, these home improvements could be on it. 

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No. 6: New vinyl siding | Theresa Solis / EyeEm/GettyImages

No. 6: New vinyl siding

Replacing old siding with new vinyl siding costs about $12,000 on average, according to the report. At resale, homeowners get back about 83 percent of what they spend, the study finds.

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"New siding adds to home curb appeal and is a recognizable feature," says Carasso.

While it's something that can improve the home's appearance, it's probably not the kind of thing you'd do just before putting the home on the market -- unless it's damaged, says Katie Severance, author of "The Complete Idiot's Guide to Selling Your Home" and Realtor with Re/Max Village Square in Upper Montclair, New Jersey.

Often, "if it's just dirty, a good power washing is all you need," she says.

Her advice on replacements: Think carefully about the colors. While white tends to show the dirt, taupe with black shutters looks "stately and rich," says Severance.

No. 5: New garage door | Sunday Times/GettyImages

No. 5: New garage door

For many street-facing homes, a garage door is the "nose on the face of your home," says David Pekel, national treasurer for NARI and the president and CEO of Milwaukee-based Pekel Construction & Remodeling.

A new garage door "has traditionally ranked as one of the highest returns on investment," he says.

The cost averages $2,300, according to the report. And it returns about 87 percent at resale.

Another hot trend: doors with more windows, says Pekel.

And thanks to technology, you can get a preview before you buy simply by uploading a photo onto a website that lets you try out different doors, says Pekel. "People are now recognizing that it has a high aesthetic impact."

One style that's hot right now: carriage-style doors. "It gives the appearance of a hand-made door," Pekel says.

And homeowners are "opting for natural wood, as well as facsimiles," he says. But both are going to require maintenance and upkeep if you want to have them looking good and working well.

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No. 4: New wood floors | Compassionate EyeFoundation/Steven Errico/Getty Images

No. 4: New wood floors

Installing wood floors will get you most of that expense back when you sell, according to the remodelers' report.

The average cost of installing new floors is about $5,500. Homeowners recoup about 91 percent.

"Homes sell better when floors are wood," Severance says. "And, yes, you can get it back."

In the Northeast especially, "oak is always popular," she says. "I don't think you can go wrong with oak."

Recently, some wood flooring has been plagued by controversy over high formaldehyde levels and off-gassing.

If you can, opt for hardwood over engineered products, says Pekel. Some contain formaldehyde.

If you prefer engineered wood, ask a lot of questions, and find a knowledgable, competent pro who can tell you what's in various options, Pekel says.

Also, understand that in some cases, you pay up for better quality. If two floors look identical and one option costs $5 a square foot, while the other is $9 a square foot, you want to know what's behind the differences, Pekel says.

No. 3: Insulation upgrade | ClarkandCompany/GettyImages

No. 3: Insulation upgrade

No one comes out of an open house excited about the insulation. But an insulation upgrade does add value. On average, it will cost about $2,100, and homeowners can recoup about 95 percent at resale, the study finds.

"We're headed in the direction of homes being evaluated by energy efficiency as a matter of routine," says Severance.

And upgraded insulation would be something that real estate agents would highlight, she says. "It would be something that would improve the value."

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Buyers simply expect some parts of a home -- such as plumbing and heat -- to work, she says.

But it's also important to look at the "emotional return on investment," says Mike McGrew, 2016 treasurer for the NAR and CEO/chairman of McGrew Real Estate in Lawrence, Kansas.

So evaluate potential projects based on how they'll affect your enjoyment and your feelings about your home and the time you spend there, he says. "You don't want to dread coming home every day because you get a bad vibe."

No. 2: Refinished hardwood floors | Goran Minov/EyeEm/GettyImages

No. 2: Refinished hardwood floors

Want to get back all of your home renovation dollars? Refinish those hardwood floors.

Refinishing costs an average of $2,500 and that's about what it adds to home value, the study finds.

"How many bedrooms, how many bathrooms? That's what gets you in the door," says McGrew. "But sizzle is what gets you to sign the contract, and hardwood floors are part of that."

"It's really a smart thing to do to market a home," says Severance. "But you won't get any of it back if the paint is peeling." It has to be part of the total package, she says.

She recommends that potential sellers paint the house. "There's no ROI (return on investment) higher in real estate than paint," says Severance.

No. 1: New roof | Mischa Keijser/GettyImages

No. 1: New roof

Among home renovations that return the most, replacing the roof tops the list.

A new roof will set the average homeowner back about $7,600. But on average, homeowners recoup more than that -- about $8,000 -- at resale, according to the study. That's a 105 percent gain.

It's the only renovation project in the report that returned more than it cost. But, as anyone who's been through it will tell you, there are plenty of easier ways to make $400.

And it's not the kind of thing that pushes the needle for buyers, says Severance.

"Nobody ever decided to buy or not buy a house because of the roof," she says.

"Buyers do not expect a new roof," says Severance. "They expect a roof to be working. They expect it not to be leaking."

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