Don’t Believe This Dangerous Myth if You’re Renovating Your Home

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When it comes to home renovation projects, there’s a lot of false information. Learn what happens when you believe this common myth. 

Myth: Home renovations always increase your home’s value.

Truth: Some home renovations will increase your home’s value, while others will cost more than the value they deliver.

Yes, one of the biggest myths home renovators believe is that every home renovation will automatically boost the value of their house by at least as much as they pay for the project. But according to recent data from Remodeling Magazine’s 2023 “Cost vs. Value” report, only a few projects on average will improve your home value by as much as you pay. Which projects will increase your home’s value the most? Let’s take a look.

To boost your home’s value, replace doors and improve energy systems

On average, the project that returns the most value for homeowners is converting fossil-fuel heating equipment to electric heat pumps. According to Remodeling Magazine, electrifying your HVAC in this way would cost about $17,747, but would add roughly $18,366 to your resale value. All in all, that’s a 103.5% recoup of your costs.

Next on the list are door replacements, specifically garage and entry doors. These low-cost projects can boost your curb appeal by freshening up some of the first features home buyers notice. According to the report, a garage door replacement would cost about $4,302, but could add $4,418 in resale value, while a steel entry door would cost roughly $2,214 and add about $2,235 in resale value.

Re-siding your home could also boost your home value by as much as your project costs, though you’ll have to be picky about what materials you use. According to the report, replacing the bottom portion of your home with a band of stone veneer would recoup about 102.3% of your costs, adding $11,117 in resale value but costing only $10,925. Residing with fiber cement, however, would cost $19,361 but add only $17,129 in resale value.

Avoid upscale kitchen and bathroom renovations

Contrary to popular opinion, renovating a bathroom or kitchen doesn’t always boost your home’s value — at least not by as much as you pay for it.

Looking again to the Remodeling Magazine report, upscale bathroom renovations are one of the poorest projects in terms of resale value. With an average cost of $104,733, the resale value on an upscale bathroom would add about $27,830, for a meager 26.6% return on your investment.

What does an upscale bathroom renovation look like? Well, according to the report, it would be a bathroom sporting a neo-angle shower with “ceramic tile walls, accent strip, recessed shower caddy, body-spray fixtures, and frameless glass enclosure.”

Another poor investment would be a major kitchen remodel, which would include upscale custom white cabinets with built-in sliding shelves, stone countertops, built-in commercial-grade appliances, and a high-end sink with designer faucets. The project, on average, would cost about $154,483 and recoup only 31.7% of your costs for a resale value of $48,913.

Should you renovate your home?

First, keep in mind that home renovations are fine if they benefit your well-being, fulfill a need, and are something you can pay for out of pocket or with financing (like a second mortgage). But when done to boost the equity of your home, you should be choosy, as not every project will return in equity what you pay upfront.

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You can use the Remodeling Magazine report to get a good idea of which projects on average yield the most return, but talk to a real estate agent for a better idea of what’s popular in your area.

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