If the exterior of your home is looking rough and weathered, replacing the siding is one of the best ways to boost resale value. If you opt for mid-range or upscale siding, you’re likely to recoup 75-90 percent of the cost at resale, which is a high return.
The return on investment is well documented. In the annual Cost vs. Value Report by the National Association of Realtors and Remodeling magazine, new siding consistently ranks as one of the most cost-effective home improvement projects. The report is considered the gold standard when it comes to ranking home improvement projects by payback.
However, different types of siding produce different returns at resale. According to the 2014 Cost vs. Value Report:
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- Among upscale projects, fiber-cement siding replacement produces more bang for your buck than any other home improvement effort. The average job costs $13,378, of which 87 percent, or $11,645, is recouped.
- Among mid-range projects, vinyl siding replacement ranks No. 8. The average homeowner spends $11,475 and recoups 78.2 percent, or $8,975.
- Low-end siding replacement, as you might have guessed, doesn’t make the list. Installing cheap or low-grade vinyl might save money upfront, but it’s bad for resale value.
Keep in mind that the exterior of your home is a buyer’s first impression. If the outside of the home is in poor condition, some people won’t step inside. They’ll assume that the interior is also in disrepair. That’s why exterior projects tend to rank high on the list.
Other High-Return Projects
There are many other projects that produce a significant return on investment, according to the Cost vs. Value Report. If you’re looking to spend less than $2,000, consider installing a steel front door or replacing the garage door. A wood deck addition, a minor kitchen remodel and converting the attic to a bedroom all fall in the 80-90 percent return range.
Window replacement, a bathroom addition, roofing replacement and basement remodeling also fall in the top 10, but the returns are lower, ranging from 60 to 80 percent.
If your home needs a significant amount of work, talk to a local real estate professional about prioritizing projects. You probably don’t want to spend money building a deck if the roof needs to be replaced. Most homeowners can benefit financially from making some improvements prior to selling, but it’s easy to go overboard without a professional opinion.
A lawyer never retires. So I would just say that I am not as active as I used to be. Now I simply dedicate myself to fishing, my hobby, and my grandchildren. For Business Finance News I write about legal aspects of mortgage policies, mostly regarding the rights of policyholders. I also have articles about personal injuries.