Did you know that May is National Home Remodeling Month? It should come as no surprise that it falls during spring homebuying season as new homeowners are looking to perfect their new purchases.
Tear down a wall here, put in new tile there, add a skylight– the options are endless. In an ideal world, you could do it all, but before tackling home renovation projects it's important to plan carefully with return on investment (ROI) in mind. Harvard University's Joint Center for Housing Studies estimates that homeowners are expected to spend $340 billion on renovations this year, but the average remodeling job only recoups less than two-thirds of the cost.
What can you do to help ensure you're making a smart investment? The National Association of Home Builders says small-scale renovations are the most cost-effective and quickest way to add value to your home.
Here are six home improvement projects that will almost pay for themselves in resale value:
- Paint. A study from Zillow found that painting your home light shades of blue correlated to an increase in home value of $5,440 on average. If you're a new homeowner, spending a few hundred dollars on a do-it-yourself project to make the space feel like home is an easy project to knock out and it's a good investment.
- Insulation. Ensuring that your home is properly insulated could save your hundreds of dollars on your electric bill. The average price to professionally install fiberglass attic insulation was $1,343, according to a 2017 estimate from Remodeling Magazine.
- Windows. New windows freshen your home's appearance and help save you anywhere from $25 to $450 a year in heating and cooling costs, according to the federal government's Energy Star program. Consider a mid-range window replacement to maximize your ROI and insulation benefits.
- Hardwood floors. While hardwood floors may be more expensive than carpet, they are much more durable—saving you money in the long run. Pricing depends on the size of the home and materials chosen, but the National Association of Realtors® (NAR) estimates 91% of costs are recovered.
- Garage door. According to Remodeling Magazine's 2018 Cost vs. Value report, a new garage door tops the list of the best value home projects, recouping 98.3% of what it costs to install. Of course, the garage door is just one piece of a home's curb appeal, but with an ROI like that—it's almost a no-brainer.
- Landscape. Did you know grass, dirt, bushes and trees can account for 10% or more of the price of your home? Good landscape design can add up to 20% of the value to your home, according to Bob Villa. NAR estimates that six applications of fertilizer and weed control costs roughly $330 and returns $1,000 at sale.
Visit My Home by Freddie Mac® for more information on the homebuying process and be sure to follow our Spring Homebuying blog series.