Homeowners often consider various remodeling and replacement projects as a way to add value to their homes.
In a recent report, Realtors rated small and exterior projects that offer more value and give homeowners a better chance of recouping their costs.
The report, "2015 Remodeling Cost vs. Value," is compiled annually in collaboration with Hanley Wood's Remodeling Magazine. It compares changes in home improvement project costs with Realtors' perceptions of what those projects contribute to a home's price at resale.
"It can be a daunting task to even decide on what home improvement projects to undertake, let alone to physically tackle and complete them," said Chris Polychron, president of the National Association of Realtors and executive broker with 1st Choice Realty in Hot Springs, Ark.
"Realtors know what buyers are looking for during their search, and curb appeal is and always will be important," Polychron said. "That explains why Realtors once again rated exterior projects as some of the most attractive and valuable for homeowners."
HouseLogic.com, the NAR's consumer website, highlights the results of the report in its "Best Bets for Adding Value to your Home in 2015" slideshow. The site also provides information and advice on numerous home improvement projects, including bathroom remodeling ideas that will add style and value to a home.
Just as they did last year, Realtors identified a steel entry door replacement as the project expected to return the most money, with an estimated 101.8% of costs recouped upon resale, compared to an estimated 96.6% recoup last year.
The steel entry door replacement is consistently the least expensive project in the annual Cost vs. Value Report, costing little more than $1,200 on average and was the only project on this year's list to recoup more than 100% of its cost at resale on a national level.
Realtors also identified several other projects that would make the biggest financial payoff upon resale, most on the exterior of the home.
Rounding out the top 10 projects in terms of cost recouped include a manufactured stone veneer (newly featured in this year's report) at 92.2%, a garage door replacement (88.5%), siding replacement with fiber cement (84.3%) or with vinyl (80.7%), a wood deck addition (80.5%), a minor kitchen remodel (79.3%) and wood window replacement (78.8%).
Since 2003, replacement projects resulted in a higher financial return than remodeling projects. However, the gap between replacement and remodeling projects became bigger this year as both categories declined in value. Realtors reported a 2015 average return for replacement projects at 73.2% (slightly below the 2014 number of 73.7%), while remodeling projects fell to 60.8% in 2015, down from 65.1% last year.
This results in an overall cost-value ratio of 62.2%, a drop from 66.1% last year. The biggest contributing factor to the slip is the consistent rise in costs for these projects, with home values rising at a slower pace.
As in previous years, the Pacific region experienced the best overall cost-value ratio of 74%. The region - which encompasses California, Oregon, Washington, Alaska and Hawaii - typically sees higher cost-value ratios on account of higher resale values.