The spring brings us warmer weather, flowers and for some of us a nice check from the IRS. What are some of the best ways to use that extra money? Investing these funds back into your home can not only provide you with some immediate enjoyment, but can also increase the value of your home that pays off when it comes time to sell.
There are many great ideas to make the best of this new found money. According to research teams from both the National Association of Realtors as well as Realtor Magazine, there were top findings of which property enhancements offered the most return on investment. Here were their best performing projects.
Front Door – Replacing that tired and worn front door with a beautiful and architecturally stimulating one can not only enhance your home’s curb appeal, but it can also increase energy efficiency and safety. A new steel entry door on average costs just over $1,100 but has a ROI of over 96%.
Garage Door – In the same vein of exterior doors, replacing older and damaged garage doors with a clean and modern one costs on average about $1,500 and has an ROI of over 83%. As a garage is a sought after amenity that has a big impact on appearance, this is a great investment.
Windows – Last, but not least for the appearance of your home’s exterior would be the importance of good, fully functioning windows. New, energy efficient windows will cut down on your monthly energy costs and potentially earn you tax credits with select models. Replacing windows with wood replacements has a 79.3% ROI while vinyl replacements are at 78.7%.
Deck – Everyone loves some outdoor enjoyment and a great space to entertain. A 16 foot by 20 foot deck will cost on average about $9,500 but you will gain an 87.4% return on it after resale. For those who already have a deck, consider improving it with a fresh coat of paint or stain, adding a bench or screening.
Add a Bedroom – An additional bedroom can significantly add value to your home. Finishing off an attic into a 15 foot by 15 foot bedroom with a 5 by 7 bathroom with shower does cost you close to $50,000, however, you can expect an 84% ROI on the project. You can consider saving money by skipping the bathroom yet your ROI will decline as well due to value lost in having to go downstairs for a bathroom.
Update Your Kitchen – Kitchens are one of the most important rooms as well as biggest focal points in any home. That being said, having an updated kitchen can tremendously add value to your home. The great news is you don’t have to gut your kitchen down to the studs to make a big difference. Sometimes you can keep your existing cabinets but replace the doors and drawers. Combine that with some new energy efficient appliances, new sink and countertops and you will have made a big improvement for significantly less than a full remodel. This type of mid-range remodel can yield an estimated 82% ROI.
Want to make another great financial move but don’t want to take on a project? Consider making one extra mortgage payment per year applied to your mortgage principal. This can considerably reduce your overall debt. In fact, one extra mortgage payment per year brings the lifespan of a 30 year mortgage down to 22 years. Make this even more budget friendly and spread that payment over 12 months by paying 1/12th per month.