According to the Harvard Joint Center for Housing Studies, Americans are on pace to continue annual improvement and repair spending on home remodeling projects by 9% through 2022. With more people working from home and spending time indoors, it's easy to see the draw.
But beyond making their spaces more comfortable to live in, many homeowners have their sights set on renovations that increase their home’s value.
What to know about ROIReturn on investment (ROI) tells you whether spending money on a renovation investment will ultimately result in financial gain. Here's how to calculate ROI:
Return on investment = (Value of investment – Cost of investment) ÷ Cost of investment
ROIs for home remodeling projects are about 60% on average. However, some projects offer higher returns than others.
What renovations increase property value the most?
So, what are the best home improvements to increase your property’s value? The projects with the highest ROI typically make a house more move-in ready and enhance curb appeal.
1. Kitchen remodelIf there's one thing prospective homebuyers want, it's nice kitchens. A minor kitchen remodel in Portland, Oregon, costs about $27,000 with around an 80% return on investment. For a major renovation, you're looking at roughly $79,000 for the project with a 58% ROI.
Higher-priced renovations don't always equate to more recouped costs. However, if you're not planning to move, your personal enjoyment of cooking in an upgraded kitchen shouldn't be overlooked.
If there are two things prospective homebuyers want, it's nice kitchens and updated bathrooms. Because bath remodels and additions can be among the priciest and most complex projects buyers tend to prefer that they're already done.
2. Bathroom remodel or addition
A mid-range bathroom remodel in the metro area is about $23,000 with a 68% ROI. Additions run $57,000 on average and offer around 64%.
3. Finished basement
Lots of Portland-area homes have basement square footage, and local buyers love a finished basement. This renovation is usually around $20,000.
However, it can quickly reach $80,000 or higher, depending on whether you're waterproofing the space, putting in egress windows, adding a bathroom, or more. You can expect to recoup as much as 70% of the cost to finish your basement.
4. New Windows
Older houses often don't have energy-efficient windows, and replacing them costs about $20,000. While it might not change the appearance of your home, it's a detail that many buyers look at. You can expect to recover roughly 71% of the cost for this project.
5. Central airHomes with central air boast 2.5% higher sale prices than those without. Considering the Pacific Northwest's hot, balmy summers, a whole-house air conditioning system can increase your home value by 10%. This home improvement shouldn’t be overlooked, seeing as the cost of the project is usually under $10,000.
6. Roof replacement
A new roof does more than make a home look nice. In rainy Oregon, it minimizes the risk of leaks and rot and signals that a house can stand up to wet weather. Portland roof replacements are about $28,000 and offer a 65% ROI—extra points if you install new gutters as well.
7. New garage door
Replacing your garage door is among the best home renovations that add value, as it's a relatively easy and affordable way to boost your curb appeal. The project will only run you $2,000 to $4,000, and you'll recoup about 93% of the cost.
Fund your remodel with a HELOC from CCCU
If you've been paying down your mortgage for at least a few years, you may be able to fund your renovation with a home equity line of credit. Since the revolving credit line is secured by your property, you can typically get a lower interest rate than with a traditional loan.
CCCU serves those in and around the Portland metro area and surrounding counties. With branches in Portland and Hood River, plus online banking and nationwide ATM access, we make it easy to manage your accounts.
Join our credit union today or contact our lending team for more information.