Americans are expected to spend a record $340 billion on remodeling this year.
Oh, but where to spend all that money?
If you’re planning to live in your home for decades to come, spend it where you’ll enjoy it. But if you’re thinking of selling, there’s a different answer.
Homeowners are most likely to get their money back on very visible, relatively inexpensive improvements, according to two recent studies that seek to measure return on investment for home projects.
One of the reports, called the Cost Vs. Value study, concluded that adding a new steel front door and a new garage door may actually add more in sales price than what they cost. Adding stone veneer to an exterior comes close, returning an estimated 97 percent of its cost.
"’Curb appeal’ projects — changes to doors, windows and siding — by and large generated higher returns on investment than work done inside the home," the report stated. "Meanwhile, projects that called for replacing something, like a door or window, scored higher among real estate pros than did remodels."
Similar conclusions were reached by the other report, published by the National Association of Realtors and the National Association of the Remodeling Industry. The study, called the Remodeling Impact Report, found that homeowners get the most bang for their buck with new roofs, new wood floors, refinished wood floors and (again) a new garage door.
Both studies compare builders’ estimated costs of projects to real-estate agents’ estimates on how much the projects would add to the price of a house.
While spending money on more routine improvements yields the best returns, lavish discretionary projects don’t fare as well.
The lowest return on investment come from a new patio and an "upscale" bathroom or master suite addition, according to the Cost Vs. Value Report. The Realtors’ report came up with a similar lineup: A new master suite, a new bathroom and a remodeled bathroom yielded the lowest returns.
In fact, as the Realtors’ study finds, agents almost never recommend big home-improvement projects. Only 2 percent of agents, for example, recommended finishing an attic or basement before selling a house, according to the report.
Instead, agents say homeowners are better off showing the house they have in its best light instead of trying to make it a new house.
"The thing that gets the most bang for your buck is to declutter everything," said Jill Rudler, a Keller Williams Excel agent in Westerville.
"Take 50 percent of what you have and remove it. The second thing is to paint. It’s inexpensive and will give a nice clean, fresh look to the weariest of houses. And replace any worn floor covering. The last you do is a deep cleaning."
If a piece of the house is broken or so dated that it’s a clear distraction, homeowners might also consider replacing that.
In fact, the most common reason homeowners replace a garage door is because it doesn’t work anymore, not to add to the sales price, said Amber Cramer, who owns Central Ohio Garage Doors with her husband.
"People who are selling the home may replace it, but if they put in a new door, it may not be a nice door, but just a simple one that works," she said. "If they’re planning on staying, they’re more likely to install an upscale door."
Homeowners who don’t care about return on investment can enjoy remodeling simply to make their home more livable and pleasant. The Realtors study found that 75 percent of homeowners said they wanted to spend more time in their home after remodeling.
When asked to rate the "joy" remodeling projects gave them on a scale of 1 to 10, homeowners gave the 20 projects an average score of 9.6.
"Realtors understand which remodeling projects and home upgrades will bring the most value to homeowners," said William E. Brown, the 2017 president of the National Association of Realtors. "Realtors also understand that many of these projects are undertaken solely to get more enjoyment from spending time at home."