ROI: It's not just about the Money10/14/15 at 01:56 PM | Published Under Budget
Defining home improvement ROI: It's not just about the money
(BPT) - If home improvement was only about increasing a home's resale value, perhaps more people would live in homes that had steel entry doors, manufactured stone veneer and/or vinyl siding and interior walls that were a uniform beige. But when you're calculating the potential return on investment of any home improvement project, you need to consider more than just the cost.
In addition to resale value, your ROI calculations should also take into account the emotional satisfaction of a project, how it will affect your enjoyment of your home, and its impact on the house's livability. Some projects definitely return more of their investment at the time of resale - like that steel front door. But not everyone will fall in love with how a steel door looks, and may find the richness of wood more aesthetically satisfying. Other projects may really boost your enjoyment of your home, but be problematic when you one day want to sell; in-ground pools come to mind.
While some improvements you do because you have too - such as replacing the roof - a few home improvements positively affect resale value, increase a home's livability and elevate your enjoyment. These are the projects that you also do because you want to. Here are a handful of home improvements that meet all the criteria for a great investment not only when you sell but while you're living in the home:
In the realm of home improvements, adding skylights is one of least expensive upgrades you can choose for the functionality and appearance benefits they provide. You get a healthy nudge in resale value plus significant emotional and aesthetic benefits. Skylights, which are particularly popular in kitchens and baths, admit more natural light into a home - which is always appealing to buyers - so when you're selling, rooms with skylights will appear bigger, airy and more inviting. While you're still living in the home, you'll reap the psychological and health benefits of more natural light and ventilation.
Opt for Energy Star-qualified, solar-powered, fresh-air skylights and you can use the skylight not only for natural light but to provide passive ventilation that improves indoor air quality. You'll enjoy the skylights even more since if they come with a programmable touch pad remote to operate not only the skylights but also energy-efficiency-boosting accessories like blinds in designer colors and patterns. What's more, solar powered skylights and blinds, along with installation costs, are eligible for a 30 percent federal tax credit.
A minor kitchen remodel of around $20,000 returns nearly 80 percent of your investment when you sell your home, according to Remodeling Magazine's Cost vs. Value Report. Upgrading your kitchen can also be deeply satisfying emotionally, giving you a chance to express your creativity while achieving gains in usability at the same time.
In practical terms, new kitchen appliances tend to be more feature-rich, usable and energy-efficient than older models. The same is true of kitchen faucets, which can allow you to waste less water or even thwart the spread of germs. New cabinets and countertops expand storage and work space while redefining the entire look of the kitchen.
Bathrooms help sell homes, and remodeling yours can recoup 70 percent of the investment cost when you sell your home, according to Remodeling Magazine. Since bathrooms are far more important than their practical purpose, an improved bathroom can realign how you feel about your living space. A soaking tub, great shower experience, fresh finishes and even fresh paint can all deliver more positive feelings about your bathroom.
What's more, replacing older faucets and fixtures can actually give you the satisfaction of reducing your water bill. Newer toilets, showerheads and faucets use less water to deliver the same quality of experience as older, less efficient models. Curbing water waste can save you money - and that's something anyone can feel good about!
Consider adding fresh air skylights to both rooms - in the kitchen for light and to vent cooking odors and heat and in the bath for more light, ventilation and privacy. They are cost effective upgrades that deliver both functionality and resale value.
Just as you would never take a job based only on the salary, you should never undertake a home improvement solely on its monetary value. Instead, consider all the elements of ROI - from cash to emotion - before deciding how to spend your home improvement dollars.