Kitchen with Shaker-style cabinet door fronts
Spring makes lots of homeowners eager to start work on house projects designed to increase the resale value of their homes. You can find lots of information on the web about the ROI (return on investment) of various home improvements. But do you know which ones yield the best ROI in the Denver metro real estate market? I do…so read on!
Highest ROI Home Improvements in the Denver Metro Area
According to the Remodeling 2017 Cost vs. Value Report (www.costvsvalue.com), homeowners in the Denver metro area will get the best ROI on a minor kitchen remodel. Remodeling magazine, which compiled the report, defines a minor kitchen remodel as:
“In a functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace fronts with new Shaker-style wood panels and drawer fronts, including new hardware. Replace cooktop/oven range and slide-in refrigerator with new energy-efficient models. Replace laminate countertops; install midpriced sink and faucet. Repaint trim, add wall covering, and remove and replace resilient flooring.”
Denver-area homeowners who take on a minor kitchen remodel can expect an ROI of approximately 87%. The job will cost roughly $20,000 and will add approximately $18,000 in resale value.
The Cost vs. Value Report lists the minor kitchen remodel as one of 19 “Midrange” projects.
TOP 5 MIDRANGE PROJECTS WITH HIGHEST ROI
Remodeling 2017 Cost vs. Value Report
In descending order of ROI
Minor Kitchen Remodel
Manufactured Stone Veneer (siding on lower third of the side facing the street)
Attic Insulation (fiberglass)
Deck Addition (wood)
The Cost vs. Value Report also looked at projects it labels “Upscale.” These typically have higher budgets than the Midrange projects, but not always. Among the 10 Upscale projects, the one with the highest ROI in the Denver metro area was Garage Door Replacement. This is defined as:
“Remove and dispose of existing 16×7-foot garage door and tracks. Install new 4-section garage door on new heavy-duty galvanized steel tracks; reuse existing motorized opener. New door is high-tensile strength steel with two coats of factory-applied paint, and foam insulated to minimum R-12, with thermal seals between pinch-resistant panels. Windows in top panel are ½-inch insulated glass. Hardware includes galvanized steel hinges and ball-bearing urethane rollers. Lifetime warranty.”
In the Denver metro area, it costs about $3,400 to replace a garage door in this way. The improvement will bring approximately $2,600 in return, for an ROI of roughly 77%.
Lowest ROI Home Improvements in the Denver Metro Area
I wouldn’t be giving you the best service and advice if I didn’t also let you know which home improvements have the lowest ROI in our market.
According to the Cost vs. Value Report, homeowners in the Denver metro area should think carefully about installing a backup power generator. With a cost around $12,700, a backup power generator will only bring about $4,700 in resale value. That works out to an ROI of only 37%. That’s the lowest in the Denver metro area of all of the projects in the report.
Other projects that don’t even break the 60% ROI mark include:
- Midrange Bathroom Addition (49.7%)
- Upscale Bathroom Remodel (53.4%)
- Midrange Backyard Patio (55.4%)
- Upscale Universal Design Bathroom (58.7%)
- Upscale Bathroom Addition (59.1%)
- Midrange Entry Door Replacement, Steel (59.8%)
Why Do Some Projects Have Such a Low ROI?
The Cost vs. Value Report simply presents the data. It doesn’t delve into the reasons why some projects have such a low ROI. From my experience as a Realtor in the always-interesting Denver metro area real estate market, I can tell you it usually boils down to one or more of these reasons:
- You’re making expensive changes (on a per-square-foot basis) to a relatively small area. For example, you’re using luxury materials in a one-vanity bathroom with a combination tub and shower.
- Or you’re turning yours into the nicest house in the neighborhood, by a long shot. For example, you’re adding a 400 square foot master suite over your garage when the next-largest house in your area tops out at 1,600 square feet.
- Or maybe you’re adding a feature that is only important or of interest to a small percentage of buyers. For example, you’re adding built-in drawers and shelving to permanently turn a bedroom into a home office, or adding a koi pond in the back yard.
Considering Home Improvements Before Selling? Let’s Talk!
I like this advice from U.S. News and World Report: “Before you decide on any renovation, look at your house with a critical eye. What aspects of your house are important? What are its drawbacks? Fix the drawbacks and focus on the important items.”
Before you commit your money to a significant home improvement project in hopes of increasing your resale value, give me a call at 303-204-6494. My experience and recommendations can save you time, money, and disappointment, and can help you get the highest resale value.