In the real estate market, prices soar for a while and then plummet. That is why it is vital for homeowners to find ways to add value in any scenario. Spending money on making your home stand out with better curb appeal, allows for a higher price when you are ready to sell. Knowing the right upgrades is essential to ensuring your return on investment (ROI) is higher.
What Is Return On Investment?
Return on investment or ROI is a calculation based on how much you spend compared to the benefits you receive. For example, if you spend $10,000 on a kitchen remodel and you increase the value of your home by $25,000, your ROI is 150 percent. In this instance, your initial investment not only recouped your outlay, but it brought you an additional $15,000. The formula for this is ROI = net return on investment / cost of investment.
Other Ways ROI Is Valuable
Experts on ROI home improvement projects consistently list items like kitchen and bathroom remodels. These are generally higher on the home buyer’s priorities. However, ROI is not always about resale. If you plan to stay in your home, a savings on utility bills over time is also a form of ROI. Additionally, these types of improvements are energy efficient.
- Iron door – Replacing your front door with a beautiful, sturdy, iron door results in as much as 101.8 percent ROI. This applies to both resale and lowering your electricity bill. A new door adds curb appeal, while an iron door is heavier and provides a shield against cold and hot weather.
- Solar panels – While not an aesthetically pleasing addition, solar panels are economically frugal. These handy devices often provide an energy cost savings of as much as 20 percent. Additionally, the government is offering tax credits for solar panel additions. As far as resale, solar panels can increase your home value by $10,000+.
- Adding square footage – This one is a ROI for resale purposes, although some would say more space has its benefits when your family grows. At this point, adding a home office is definitely a large ROI as many of us now work from home. A new home office amounts to approximately 54 percent ROI while building a family room means as much as 78 percent ROI.
- New windows – Adding new windows provides perhaps the highest number of ROI reasons – value, efficiency and curb appeal. Homes with new windows tell a potential buyer that an expensive remodel is completed, that the home is more secure, and it looks better from the outside. Homeowners experience a reduced electric bill and a more comfortable home.
- Siding – For an exterior bang for your buck, siding replacement is another great option. A home looks fresh and updated with new vinyl or fiber-cement siding and is also more eco-friendly.
Key Takeaways
- Increase the value of your home by choosing projects that carry a high ROI.
- ROI is not just about resale benefits but also savings over time in utility bills and comfort of the home.
- 5 ways to make your home more energy-efficient and increase its desirability include an iron door, solar panels, new windows, and siding.
Forever Iron Doors offers endless options for your new iron door. From custom to in stock, every door is constructed with pride and quality. Our designers are ready to help you choose the right look for your home and bring your dreams to life. With a storefront in Westbury, we serve all surrounding areas. Contact us today to get started at 631-312-5566.