For example, if you spend $1,000 on siding, and it adds only $500 to the resale value of your home, that upgrade is giving you a 50 percent return on your investment.
Remodeling magazine’s latest cost-value-study, which is based on surveys of real estate agents, can help provide a ballpark reference. You can find it here: www.remodeling.hw.net/2013/costvsvalue/national.aspx
That said, when home prices are rising fast enough, like during the last housing boom, it’s easier to recover costs spent on home improvements, regardless of the upgrade. The alternative scenario also holds true.
• Prioritize repairs and curb appeal. Making the master bedroom bigger or converting a downstairs closet into a half-bath might seem like good investments, but not if you need to upgrade your roof or fix window seals.
Those fixes may not be aesthetic upgrades, but often make a home easier to sell.
Replacing your front door might cost you $1,500, but it’s the type of upgrade that can make a home attractive to buyers, says Sal Alfano, editorial director of Remodeling magazine.
The magazine says replacing the front entry with a 20-gauge steel door is the upgrade from which homeowners can expect to recoup the most money among renovations that cost less than $5,000. The magazine estimates a recovery of 85.6 percent of the cost.
• Consult an expert. Before moving forward on a home improvement project, consult with a real estate agent or an appraiser who knows your market. They should be able to gauge how the upgrade could affect the sales price of your home. That can help you determine how much of your investment you’re likely to recoup.
Almost all appraisers are independent and set their own fees. A consultation could cost between $500 and $1,000.
Real estate agents might be willing to offer their assessment for free, perhaps with the understanding that they might earn your business when it comes time to sell.