Rosalind Evans
Homeowners still invest in renovations, even as the pandemic-era renovation frenzy cools. According to the 2024 Cost vs. Value report from Zonda Media, some home improvement projects now offer the highest return on investment (ROI) in history, with a few upgrades averaging nearly 200% returns.
Curb Appeal Reigns Supreme
Forget the designer kitchens and luxurious bathrooms; the top returns come from exterior improvements. The Zonda report highlights nine out of the top ten ROI projects are related to curb appeal. “When it comes to adding resale value to a home, exterior replacement projects continue to make the most sense,” stated Clay DeKorne, chief editor of Zonda’s JLC Group.
Garage door replacements lead with a 194% ROI, then upgrading to a steel front door at 188%. Both of these projects are worth nearly double compared to last year.
High Returns Amidst Rising Costs
Some exterior projects still promise significant returns despite rising construction labor and materials costs. Only three projects on Zonda’s list typically deliver over 100% ROI: replacing garage doors, upgrading to a steel front door, and installing a stone veneer.
“Discretionary projects like an upscale bathroom or kitchen remodel will feel valuable to those who make the selections but won’t provide nearly as much return to sellers,” DeKorne explained. Minor kitchen remodels, such as painting and updating the backsplash, provided a 96% return, but significant upscale remodels lagged with returns of 38% for kitchens and 45% for bathrooms.
Strategic Upgrades in a Competitive Market
With high home prices and limited inventory, sellers must strategically attract top-dollar buyers. Todd Tomalak, Zonda’s principal of building products research, emphasized, “A new garage door or new entry door can make a pronounced difference. It could be the thing that makes one house stand out against all the others, making the home worth a higher price.”
Due to the Federal Reserve’s rate hikes, financing these renovations through home equity loans or lines of credit has become more expensive. Therefore, choosing the right projects is crucial. In some areas, adding a pool might pay off significantly, while in others, it might not be as beneficial.
Practical, Un-Exciting Improvements
“The un-sexy upgrades are more important,” noted Angelica Ferguson VonDrak, an associate real estate broker in Rhinebeck, New York. Essential improvements like HVAC conversions, new roofs, or window replacements are critical. Additionally, thorough cleaning, decluttering, and updating furniture can make a substantial difference. “You want everything to feel fresh and new,” VonDrak advised.
Investing in the right home renovations can yield historically high returns, mainly when focusing on curb appeal and essential upgrades. While luxurious interior remodels may seem appealing, they don’t offer the same ROI as strategic exterior improvements. Homeowners should consult with local realtors to determine the most valuable projects for their area.
