The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today encouraged homeowners to prioritize outdoor renovation projects when seeking to increase their potential return on investment.
“The latest data shows that home improvements focused on the outside of a property are most likely to result in a positive cost-to-value ratio,” said Appraisal Institute President James L. Murrett, MAI, SRA. “However, spending money on renovations doesn’t necessarily generate a dollar-for-dollar return. Bottom line: cost doesn’t necessarily equal value.”
According to Remodeling magazine’s most recent Cost vs. Value report, the projects with the highest expected return on investment are manufactured stone veneer, steel entry door replacement, wooden deck addition and minor kitchen remodel. Other projects with potential payoffs, according to the report, are siding replacement and universal design bathroom.
The longer a homeowner stays in a property, the greater the opportunity for a return on investment. Murrett advocated that homeowners considering improvement projects compare the planned renovation to what’s typical in the local area.
“Renovations that elevate a property well in excess of community norms are typically not worth the cost when the owner sells the home,” Murrett said.
