This might come as a surprise to you but not all home improvement projects add value to your house and property.
Regardless if your project is a house renovation project or a simple product replacement, the aftermarket value relative to the measuring of investment cost recovery varies with each project.
It is widely accepted that home improvement projects like roof material, siding and paint work are required to maintain your property value.
Although aside from these general house improvements mentioned for maintaining and preserving the value integrity of your house, this discussion with be focused upon home improvement projects that are intended to increase the value of your property, rather than preserve.
A home improvement project should not be confused with home remodeling projects that are intended to upgrade or change the existing conditions of your house. Although in some cases home improvements can be applied during house remodeling.
House remodel projects are normally motivated by the owner’s desire to make their personal space as attractive and functional as they can afford, while with the best house improvements are normally driven by the need to make the house more energy efficient to save money.
One of the most important questions in evaluating an improvement project is; how much will the improvement contribute to the future market value of your property?
It depends, there is no right or wrong answer to this question. It depends on many other factors such as;
- a) Are house prices rising?
- b) Are the house improvement cost proportionate to the existing market value?
Remodeling Magazine publishes the returns on various home improvement investments.
Their conclusion is that most house remodel projects will recovery between 45% – 90% of the actual project cost when the owner sells.
This assumes a static sales price market and represents projects like kitchen remodeling & bath remodeling, room conversions and wood or stone floors, ect…
If your financial ROI is a high priority, we have some highly overlooked recommendations that outperform all other house renovation projects.
These house products include solar systems, attic insulation, low e windows and the removal of non load bearing walls in dated homes.
Learn about the 4 best home improvement projects in Houston that offer the highest return on investment
Residential Solar System
Residential solar systems have come of age. The price of solar panels has fallen over the last 15 years and the price of electricity has risen.
These two simple facts have made a residential solar system financially attractive for homeowners.
The lending markets have also begun the universal acceptance of financing solar systems for homeowners with greater finance choices.
It is very few home improvement projects that will actually pay for themselves.
In order to really understand the financial benefits, one must understand how a solar system works to pay for itself.
In basic terms a solar system consists of solar panels usually 200kw – 300kw in size. These panels are wired together and connected to an inverter.
The inverter transforms the direct current (DC) into alternative current (AC) which is what is used to power our homes and electricity needs.
The inverter is connected to a switch board that either transfers the electricity to the house in the case of power generation or transfers it back through the power grid.
It is by this method that you either consume the electricity your system is producing or return (sell) the electricity back to your provider.
In the last 5 years the solar industry has developed battery storage capabilities to allow owners to preserve the electricity for future use instead of being forced to return it to the grid.
In a house remodel or improvement project, a solar system must be exclusively designed around the specific home owner’s electricity use.
The kilowatt usage is taken from the history of your homes electrical bills and converted into number of solar panels.
When a homeowner purchases a solar system for their home it requires a large capital investment much like any house remodel or improvement.
The difference with a solar system then other improvement projects is that a solar system will pay for itself.
It not only increases the property value of the future market value. It also generates electricity for the house offsetting the bulk of your monthly electric bill in high electrical demand periods and earns you money in low electrical demand periods.
Home Insulation
Attic fiberglass insulation is one of the highest returns on investment of all home improvement projects.
An owner can either have fiberglass insulation blown into the attic from an insulation truck or install new blanket fiberglass insulation instead in the attic area.
The blown insulation is commonly more cost effective but will compress over time requiring more insulation to be added in the future.
When undertaking a house improvement project, remember that the thickness of insulation is defined in a R factor in the real estate industry.
The larger the R factor the greater the insulation value. Fiberglass insulation loses its effectiveness if it is packed into a space.
Therefore, wall insulation is only limited to the depth of the stud thickness of the walls. These are usually 2×4 or 2×6 lumber members.
This represents either a R-13 or a R-19 respectively.
The attic insulation has the ability to increase the depth to as much as R-38. This represents about 6 inches in a blanket or 13 inches in blown insulation.
By adding insulation where it is required dramatically reduces the cost of heating or air conditioning your house.
Adding the proper amount of insulation can repay for the initial investment cost in as little as 5 years for your house remodel project.
This translates into the insulation continuing to save you money years after it has paid for itself.
Low E Insulated Windows & Doors
Uninsulated windows and doors represent a loss of about 40% of the home’s climate control efficiency.
This results from 2 major factors, the air infiltration around the perimeter and joint construction of a product.
Secondly, they radiate sunlight heat through the glass. For an effective climate control efficiency, a house remodel project can help.
This condition is most common in homes built before 2009, when the national energy code required (IECC) established U-factor standards for door and window glass.
The IECC established allowable levels for the transfer of ultraviolet sunlight through glass.
Different levels were created for various climate zones from the north to the south. To obtain these goals the dual and triple pain window glass cartridges were created.
The inner space of the glass cartridge was filled with a mixture of gases that reduce the transfer of ultraviolet rays.
These standards also increased the requirements for properly sealing the perimeter of the door and window frames thereby making your house improvement a success.
The current code requires exterior flashing around window frames and a dense foam to be placed in the air gap, thus reducing the air infiltration.
These requirements increase the efficiency of the thermo envelope 4-fold.
Window and door prices are as dramatic as car prices. You can pay as little as $500 a window to as much as $3,000.
So, buyer beware and take your time shopping for replacement doors and windows.
With that said, replacing your non code compliant windows with a moderate priced quality window will reduce your electric bill and stabilize your homes climate control.
The payback for recapturing your home improvement investment will be 5-10 years.
Non Load Bearing Wall Removal
There are substantial financial benefits of removing interior non load bearing walls to enlarge room spaces from pre 1990 vintage homes.
Architectural openness in house remodel arena has been heavily trending the past 15 years, the demand for an oversized common space has become well known.
Although identifying the exact financial benefits is not easy to quantify. The home sales history of statistics like the time on market and obtaining the asking price results on resale homes is hard to argue with.
The resale evidence strongly suggests that by thoughtfully removing separating walls from common living areas and creating a larger living space will sell faster than the same home without these changes.
They also suggest that buyers are willing to pay a premium for these more contemporary floor plan layout designs.
The removal of a strategic non load bearing wall with the enhancement of a new uniform hard surface floor, can add far more to the resale market value than the actual cost.
It is noteworthy that not all home improvement and house remodel projects are required or inspired to have outstanding financial benefits.
Many of these projects are the consequence of owners wanting to remain in their existing house or the personal need to add greater satisfaction through the ownership of a beautiful house.
But if your desire is to enhance your home’s value and reduce the operating cost instead of your comfort, then these 4 house improvement plans are right for you.
Conclusion
Energy home improvement projects offer the best return on investment of any house improvements options.
The ability to properly plan and execute under the watchful eyes of expert Houston contractors will provide you the assurance of the benefits of your project and the best possible return on investment.
