There are plenty of good reasons to renovate your home. Making it a nicer place to live is one of them, but so is increasing its resale value, whether immediately or over time.
Americans spend $400 billion annually on home renovations, according to the National Association of Realtors' annual Remodeling Impact Report, and if your property could use improving, it often pays to invest in it. But not all home improvements offer the same return on investment, so if you're really looking to get the most bang for your buck, it helps to know which projects are most financially worthwhile.
Specifically, there's one renovation where you're likely to recoup the money you put in -- and then some. And while it's not a cheap endeavor, it could be a very smart upgrade.
One financially sound renovation for your home
Replacing your home's roof may not be something you want to do, but from a financial perspective, it's worth spending the money. In the aforementioned report, the average cost of installing a new roof is $7,500. The average cost recovered, however, is $8,000, representing 107% of the initial outlay. In fact, 39% of the Realtors surveyed for the report advised their sellers to complete that project before putting their homes on the market, while 33% insist that replacing a roof actually helped close a sale.
Should you replace your roof?
While replacing a roof is a good way to increase your home's value, and it can also be a selling point in a competitive market, it doesn't pay to install a new roof when your current one is still functional. The lifespan of a roof can vary based on the materials used for it, but for the most part, you can expect to get:
- 20 to 40 years out of asphalt shingles
- Up to 50 years with fiberglass shingles
- 30 years with wood shingles
- 50 years with a steel roof
- Up to 100 years with a copper roof
- 40 to 60 years with clay tile
- 50 to 100 years with slate and concrete tile
If your home's roof is only 20 years old, there's a good chance it still has some life in it, in which case it doesn't make sense to replace it as a selling point alone. But if you've been experiencing roof leaks, have shingle damage, or see other evidence that your roof is starting to wear, then replacing it could be a good way to ensure that your home commands top dollar when you go to sell it.
Most home renovations don't offer the same return
Replacing your roof is only one of many home improvement projects you might choose to undertake. But keep in mind that most home renovations don't offer the same return on investment as a new roof.
New vinyl windows, for example, cost an average of $22,500 to install, but the typical cost recovered is just $16,000, or 71%. And while new garage doors are much cheaper, costing just $2,100 on average, and they come with a 95% recoup rate ($2,000), you still won't get all of your money back.
Of course, return on investment isn't the only thing to think about when making renovations. Your quality of life is also important, assuming you're renovating a home you plan to live in. But if you're flipping a house for a quick sale, then it helps to pay attention to the numbers behind your renovations to ensure that you spend your money wisely.