There are many studies done by industry associations, magazines and large real estate firms that seek to quantify the potential return value of an investment in particular remodelling projects. Some of these studies are conducted annually and done across the country (or in the US).
The results of each are strikingly similar in that they often come out with some of the same conclusions about the effect of an improvement on sale price. As an example, they will try to find homes in the same area which are totally identical except for one with the certain upgrade and one without, like a new garage door. They will then say something like, “new garage doors fetch 173% return on investment (ROI) at sale.”
Garage doors happen to be one of the most commonly cited #1 improvements to obtain positive returns. Here is the rest of the list, loosely aggregated from the various studies I have read:
- Garage Doors (150-200%)
- Entry Doors (120-150%)
- New Paint (100-125%)
- Basic Landscaping (100-125%)
- New Flooring (75-150%)
- High-Efficiency Furnace (75-125%)
- New Roof (60-100%)
- Minor Kitchen Remodel (60-80%)
- Bathroom Remodel (50-75%)
- Rebuilt Deck (50-75%)
The average returns quoted for other projects tend to drift even lower to the 25-50% ROI range, meaning you will only recover a fraction of the investment. If you’re not planning on enjoying the improvements yourself for a time, these are not generally recommended for those planning to sell their property in the near future.
But does this mean that I should not undertake any of the projects under 100% ROI in the studies before selling my home? Does it mean that I would be foolish to list my home without a new entry door and garage door?
To answer these questions, you are going to need to enlist the help of a real estate professional and/or a general contractor to decide which projects will benefit your property specifically. Why? Because those ROI numbers above across all those studies are averages. They include much higher returns found on some properties and much lower returns on others. They also average numbers from one end of the country to another, in markets as diverse as Winnipeg and West Vancouver.
So while the average number can give us some general guidance on what to consider and what to avoid, a more careful analysis is required to determine how you can unlock hidden value and realize the best possible return on the sale of your home.