home equity

Realtors® Rate Most Cost Effective Home Improvement Projects

Realtors® from across the country have rated several home improvement projects that will not only add value to your home but will also recoup most of their costs upon resale. The 2015 Cost vs. Value Report helps owners decide if a project is worth the time and financial investments.

Deciding to take on a home improvement project can be overwhelming for many homeowners, and especially if they are trying to choose a project that will give them the biggest bang for their buck. Realtors® know hat features will be most attractive to potential buyers and this report provides homeowners with that insight.

Curb appeal has always been important, so makes sense that the top five remodeling projects from the 2015 Cost vs. Value Report that will give you the highest return on investment are all smaller, exterior improvements.

Steel Entry Door. For the second year in a row, Realtors® have named the steel entry door the number one home improvement project when it comes to seeing a return on your investment. It is also consistently the least expensive project in the report, costing about $1,200 on average; it was also the only project on this year’s list to recoup more than 100 percent of its cost at resale on a national level.

Manufactured Stone Veneer. This decorative building material is made to replicate the look of natural stone for a substantially lower price. This is the first year manufactured stone veneer has appeared in the Cost vs. Value report. On average, the project will cost around $7,150 and will recoup 92.2 percent of your investment.

Garage Door Replacement. Upgrading your garage door can update the entire exterior of your home, not to mention enhancing curb appeal. The garage door is one of the first things a potential buyer will see. It is part of the first impression your home gives, so it is important that it looks its best. A midrange steel garage door averages $1,595 and will recoup you 88.4 percent of your investment.

Fiber-Cement Siding. This high-end siding is resistant to termites, rot, moisture and fire. It is also incredibly stable and does not flex, meaning you’ll save money on less frequent repainting. This project will average you $14,014, and you can expect a return on investment of 84.3 percent.

Wood Deck Addition. An outdoor entertaining space is a large draw for many buyers. A deck provides a large amount of living area and at $30 per square foot it is a fraction of the cost of an indoor addition. The average cost for this project is $10,048 and recover 80.5 percent of your investment.

Before taking on any of these projects it is important to remember that all real estate is local. According to the Greater Louisville Association of REALTORS, every neighborhood is unique and the popularity and resale value of a specific remodeling project varies from community to community. This is why it is so important to work with a Realtor®. Realtors® have unparalleled knowledge of local market conditions and can help you decide which projects will deliver the most return on investment in your area.

The 2015 Cost vs. Value Report is published by Remodeling magazine publisher Hanley Wood, LLC and is done in collaboration with the National Association of Realtors®. Additional data from the report can be found at NAR’s consumer website, HouseLogic.com.

Little-known facts about home equity

Dona DeZube of houselogic and the National Center for Real Estate Research have released some interesting facts about home ownership and how it could mean more money for you. 

•       6 out of 10 Americans have more home equity than stock equity

•       One-fifth of Americans’ total net worth is home equity

•       Homeowners accumulate an average of $167,000 over the course of their lifetimes compared to $42,000 for renters

•       American homeowners earning less than $20,000 a year have a median wealth that is 81 times greater than that of renters with a similar income

What do these facts tell us? Owning a home and paying a mortgage will earn you more money in the long run than renting or investing in stock equity.

Invest in a home, not Facebook

Like many Americans, you may wonder if overnight success in the stock market is worth the risk of investing. With Facebook’s stock going public recently, interest in stock equity has risen significantly. However, the best way for Americans to ensure wealth is to invest in home equity.  

More than half of Americans invest in home equity while fewer than half invest in stock equity, showing the strength and reliability of investing in home ownership. Simply making house payments may be a better investment than risking money on the next big initial public marketing.

Some believe that renting a home is cheaper than owning a home and will save you more money in the long run. However, the exact opposite is true: owning a home rather than renting allows homeowners to see greater financial gain. Renters are more likely to spend money than save it, while homeowners are the opposite. That means more money in the bank for a longer period of time, which quickly adds up.

Money saved in the bank is less likely to go toward a major stock investment and is more likely to accumulate wealth as you head toward retirement. For more information and interesting statistics about home equity, keep checking back here.