It’s finally almost summer! The pandemic may have changed a lot, but it can’t stop the seasons, thank goodness.
If you’re like a lot of homeowners, you’re getting revved up to work on projects designed to increase your home’s potential resale value. A simple Google search for “ROI of home improvements” yields 7.7 million results (whoa!).
But do you know which home improvements give you the most bang for your buck right here in the Denver metro real estate market? And do you know how the pandemic is changing the ROI on home improvements? I do…and I’m here to give you the scoop!
Highest ROI Home Improvements in the Denver Metro Area
|Project||Job Cost||Resale Value||ROI %|
|Garage Door Replacement||$3,676||$4,260||115.9%|
|Manufactured Stone Veneer||$9,419||$10,658||113.2%|
|Midrange Kitchen Remodel||$22,665||$22,086||97.4%|
|Window Replacement (Average)||$19,217||$18,402||95.3%|
|Deck Addition (Wood)||$13,459||$12,561||93.3%|
#1 Home Improvement ROI: Garage Door Replacement
According to the Remodeling 2020 Cost vs. Value Report (www.costvsvalue.com), homeowners in the Denver metro area will get the best ROI on (drumroll please)…a new garage door. It will cost you an average of $3,676 in parts and installation. You can expect to recoup $4,260 in resale value as a result. That’s an ROI of 115.9%. If you’re able to save on labor by doing the installation yourself, your ROI will be even higher. That’s not bad for what’s essentially a weekend project!
#1 ROI: Garage Door Replacement (115.9%)
#2 Home Improvement ROI: Manufactured Stone Veneer
A new garage door can boost curb appeal for sure. The next-highest ROI in our market comes from another curb appeal-focused improvement – adding manufactured stone veneer to the bottom third of your home’s street-facing façade. According to the report, the project will run about $9,419 for materials and labor, with an ROI of 113.2% when you recoup the average of $10,658. As appealing as that might sound, I don’t recommend this particular improvement right now. See the section on “The Impact of the Pandemic on Home Improvement ROI” below to learn why.
#2 ROI: Manufactured Stone Veneer (113.2%)
#3 Home Improvement ROI: Midrange Kitchen Remodel
Coming in at #3 on the list of highest-ROI home improvements is a midrange minor kitchen remodel. The Report defines this 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. Add new resilient flooring. Finish with painted walls, trim, and ceiling.”
Denver-area homeowners who take on a midrange kitchen remodel can expect an ROI of approximately 97.4%. The job will cost roughly $22,665 and will add approximately $22,086 in resale value.
#3 ROI: Midrange Kitchen Remodel (97.4%)
#4 and #5 Home Improvement ROI: Window Replacement and Wood Deck Addition
Rounding out the top 5 highest-ROI home improvements are replacing windows and adding a wood deck. The ROI is very similar for replacing 10 wood windows and replacing 10 vinyl windows, so I have averaged them below. The Report doesn’t factor energy savings into ROI; that can be an important extra benefit. The Report defines the deck addition at 16’ x 20’ with a built-in bench and three steps to grade. FYI: ROI for a composite deck comes in slightly lower at 87.1% on a cost of $19,843 and a resale value of $17,275.
The Impact of the Pandemic on Home Improvement ROI
When conditions require you to spend the overwhelming majority of your time inside your home, what’s inside starts to matter a lot more than what’s outside.
So even though improvements to a home’s curb appeal traditionally carry the highest ROI, I don’t think that’s necessarily going to remain true going forward. I think the experience of the last two months is going to change the way people look at their houses and what they need from their space going forward.
I still like this 2017 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.”
For example, kitchens have always been important but that last two months have made it more crucial than ever that they function well. Having space for a home office used to be a “nice-to-have;” now it’s become non-negotiable for many. Flex space that allows for a home gym also jumped up the priority list.
The Remodeling 2020 Cost vs. Value Report left out one project that I predict will become more prevalent directly as a result of the pandemic: a midrange basement finish.
Even in a modestly-sized basement, the project scope could accommodate a rec room or similar hangout space, a combination home office/guest room, and space for exercise equipment. We’re not talking anything fancy here…just insulation, framing, drywall, a few doors, carpet, lighting, and paint. My 15+ years of experience in the metro Denver real estate market tells me the ROI will come in around 80% on this.
Considering Home Improvements Before Selling? Let’s Talk!
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.
About the Remodeling 2020 Cost Vs. Value Report
Containing detailed scope definitions and descriptions of the various projects, the Remodeling 2020 Cost Vs. Value Report is © 2020 Hanley Wood Media Inc. Complete data from the Remodeling 2020 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.