How Do Home Improvements Affect Your Home’s Value?

Homeowners love home improvement, and they prove it with their hard-earned dollars. Spending on home improvement projects is expected to total $263 billion in the first half of this year!

Of course, no one is spending those dollars without expecting something in return. But some projects add more value to your home than others. Below is a comparison of three expensive home improvement/renovation projects and three less expensive projects. Costs and specs for these projects are based on Remodeling magazine’s 2013 Cost Value Report.

You may be surprised at where you’ll find the most bang for your buck.


Go Big or Go Home

Big home renovations are expensive, inconvenient and awesome when they’re done right. But how much of your costs can you expect to recoup on really big big-ticket home renovations?

Two-Story Addition
Cost: $152,470
Cost recouped: 65.4%

This is a case where a big chunk of the renovation’s payoff will come from your family’s enjoyment of the new space. This addition will cost you nearly $53,000 more than it will add in resale value. This project includes a two-story, 26-by-16-foot addition with a family room, bedroom and bathroom.

Master Suite Addition
Cost: $101,873
Cost recouped: 63.2%

This seems like a lot for a 24-by-16-foot master suite with walk-in closet and full bath. It seems even more expensive when you consider it will only add $64,000 to the value of your home. Perhaps instead consider adding a bedroom in the attic. At a cost of just $47,919, you’ll recoup almost 73% of the costs.

Major Kitchen Remodel
Cost: $53,931
Cost recouped: 68.9%

You could easily spend a lot more than this on a kitchen remodel. The specs don’t include high-end features like granite countertops and deluxe appliances. If you want to go that route with custom cabinets, tile backsplash and commercial-grade range, you’re looking at a $107,406 project that will add just $64,113 in value.

Small but Mighty

Here are three home improvement projects under $10,000 that earn their keep.


Steel Entry-Door Replacement

Cost: $1,137

Cost recouped: 85.6%

First impressions are a big deal, and this project is proof! In fact, it’s the best improvement you can make in terms of return on investment. Garage door replacements score well too, recouping 75.7% of the $1,496 cost.


Wood Deck Addition

Cost: $9,237

Cost recouped: 77.3%

Outdoor living spaces are big deal these days, so if you don’t have one or yours needs some updating, this is good place to spend money. These numbers are based on a 16-by-20-foot wooden deck with two built-in benches and planters.


Vinyl Window Replacement

Cost: $9,770

Cost recouped: 71.2%

If your windows are showing their age, it’s worth it to update them with insulated vinyl. You could also save on heating and cooling costs as you add value to your home.


The Most Important Thing to Remember

With any home improvement, but especially with big-ticket renovations, you must be careful about over-improving for your neighborhood. For example, if most homes in your area are 1,800–2,000 square feet and you add another 800 square feet to yours, you may not recover the costs of the addition when it’s time to sell.