If you get a tax refund this year, you may have a fantastic opportunity to invest in some home improvements and increase the equity in your home.
Realtor.com found the 6 most cost effective ways to spend your tax refund on your home by using the data from the 2014 Remodeling Cost vs. Value report. This report was a collaboration between several research teams including REALTOR Magazine and the National Association of REALTORS that compared the average cost and resale value of 35 popular remodeling projects across 101 American cities. The results are as follows:
1. Replace the Front Door
Adding a new front door with a sleek look may be able to increase your home’s curb appeal and improve the front doors insulation as well as toughen up security. Buying and installing a new steel entry door costs $1,162 and has a return-on-investment (ROI) of 96.6%
2. Add a Deck
Since 2007, deck additions have the best ROI. A 16-by-20-foot wood deck addition can cost you about $9,540, but the will return about 87.4% of its cost after resale. If you already have a deck, you could add some extras to it, such as an outdoor fireplace.
3. Add a Bed & Bath to Your Attic
Adding an extra bedroom can substantially increase your home’s value. Though it is not cheap – transforming an attic into a 15-by-15-foot bedroom with a 5-by-7-foot bathroom with shower can cost on average about $49,400 – there is a ROI of 84%. If you decide to not add the bathroom, the job overall will be cheaper but the ROI may not be as high because of the value of not having to do downstairs for a bathroom.
4. Replace Your Garage Door
You can replace your old, creaky garage door with a slick-moving, modernized one with an aveage cost of about $1,530 with an estimated ROI of 83.7%. Even though the garage may not rank that high on your priorty list of things to fix in your home, know that 3 out of every 4 homebuyers purchase a home with a garage.
5. Tweak Your Kitchen
Remodeling the kitchen is predicted to be the most common renovation that homemakers will choose to make in 2014, but you don’t need to have an all-out kitchen remodeling for a good investment. Leave the old cabinets, but replace the doors and drawers. Get some new energy-efficient appliances and install a new, modestly priced sink. Replace the old, worn-out countertops, and touch up the paint and fix cracked flooring. The cost for this type of mid-range kitchen remodeling is $18,856 and is estimated to have an ROI of 82.7%.
6. Replace Windows
Not only can replacing windows earn your home a good ROI, but you can also cut down on your heating/cooling bills and earn energy tax credits with energy-efficient window models. According to the Cost Vs. Value report, 10 standard windows with insulated wood replacements is about $10,900 with a 79.3% ROI. If you choose vinyl windows, the job will cost about $9,980 with an estimated ROI of 78.7%.