Article by Claire Tak
If you’re planning to sell your home, making a few repairs can help your house look its best for potential buyers. You’ll need to take an inventory of your home and note any broken or dingy items. Next is figuring out which home repair projects are worth it, meaning they will give you the best return on investment (ROI). Finally, you’ll need to set your budget and find the money to do the work.
To help you tackle this process, we’ve outlined five top home renovations along with their average estimated costs and ROI. These projects range from inexpensive cosmetic upgrades to pricier additions, like a deck.
Upgrade #1: Replace Your Garage Door
Average cost: $3,470
Cost recouped when your home sells: $3,411
ROI: 98.3 percent
Your garage makes up a big chunk of your home’s exterior. Updating your outdated garage door with a newer model can dramatically improve your curb appeal. Because first impressions are so important, replacing this feature on your home may give you almost 100 percent return on investment.
Upgrade #2: Add Manufactured Stone Veneer
Average cost: $8,221
Cost recouped when your home sells: $7,986
ROI: 97.1 percent
Fake stones are in style – they’re called manufactured stone veneers. They look like real stone but are usually made of cement and iron oxides baked in molds. You can find them on a home’s exterior cladding, fireplace, and in various places throughout the interior of a home.
Upgrade #3: Choose a New Entry Door
Average cost: $1,471
Cost recouped when your home sells: $1,344
ROI: 91.3 percent
Get rid of your old wooden door and create a fresh, welcoming entryway with a modern door made from fiberglass or steel. This upgrade this not only gives you a solid ROI, but newer doors (with fewer cracks and crevices) may improve energy efficiency in the winter or summer.
Upgrade #4: Add on a Small Deck
Average cost: $10,950
Cost recouped when your home sells: $9,065
ROI: 82.8 percent
Adding a 200-500-square foot deck is a relatively affordable way to create a brand new living space for your home without the cost and headache of a home addition. This cost estimate is based on the price of a mid-range wooden deck.
Upgrade #5: Give Your Kitchen a Modern Refresh
Average cost: $21,198
Cost recouped when your home sells: $17,193
ROI: 81.1 percent
Rather than overhauling an outdated kitchen, the most economical choice is to make simple changes that give you a lot of bang for your buck. Consider any (or all) of the following:
- Updating cabinets and countertops
- Adding new hardware
- Repainting walls
- Replacing old appliances with energy efficient models
Paying for your Home Repairs
These ideas may seem great, but affording them is a different matter. Most people don’t have thousands of dollars in the bank waiting to be used for these types of situations. But before you turn to high-interest credit cards, let’s explore a few other options to help fund your home repair projects. Here are three ideas to help you find the cash you need.
1. Take out a personal loan
You can use personal loans to pay off credit card debt, medical bills, or fund a wedding or dream vacation. Because personal loans generally have lower interest rates than credit cards, using a loan for home projects may be a wise choice. You can easily check your eligibility and apply online with many personal lenders. No worrying about going in person to the bank!
2. Home Equity Line of Credit (HELOC)
A HELOC is a line of credit based on the equity of your home as collateral. The nice thing about a HELOC is that it’s more like a credit card or business line of credit – you can use the funds you need and only pay back what you borrow.
To qualify for a HELOC, you’ll need to have enough equity in your home. Keep in mind that since your home will serve as collateral, you may risk losing your home if you can’t make payments.
3. Home Equity Loan
A home equity loan is another option, especially if you’re thinking about moving soon and you don’t want to refinance your mortgage. If your mortgage also has a low interest rate, refinancing may not be a good idea.
Just like a HELOC, when you pull out a home equity loan you’re borrowing against your home’s equity, so you’ll need to have equity in your home. Again, if you fall on hard times and can’t make payments, you could lose your home.
There’s always the chance that your home may not sell right away, so prepare yourself financially as you make repairs and upgrades. Wise planning and preparation will include looking at your overall financial standing, how much debt you carry, and what you can realistically repay.
Shop around for the best rates, talk to friends and family who made similar renovations and choose projects that will yield the best return on investment.
Claire Tak writes for Upstart about all things personal finance. She has a background in finance technology, and her work has appeared in major publications such as Forbes, Bloomberg and FOX News. Claire is based in Oakland, California and enjoys traveling in her spare time.