Each year, The National Association of Realtors®, in conjunction with Remodeling Magazine and Realtor® Magazine does a study of which projects are most in demand by buyers and how much of the cost a seller is likely to recoup when they sell their home. If you are concerned about over-improving or even under-improving, this is a great study to review. Here is an article that outlines the findings of the report: 2015 Remodeling Cost vs. Value: Less is More.
If your focus is resale, knowing what other homes in your price range have done will be critical for you as you plan and implement your project. If every other home in your price range has a chef's kitchen with custom cabinets and high-end appliances, doing your kitchen update with the designer at the local big-box store will not position your home to get top-dollar. Conversely, if everyone else is painting their cabinets and slapping on some basic granite, putting together a modest update will help you shine against the competition.
For those of you who live in the DC metro area, the best return on your investment will come from lower to mid-end projects. Across the area, the best return on investment is replacing your front door with a steel door. The return for that project is a whopping 112%. Other high return investments include, replacing your windows with wood windows (81.8%) and replacing the siding with fiber cement siding (93.8%). Garage door replacements are also a good value coming in at an ROI of 91.6%.
If you are considering a a remodeling project, keep in mind that while a mid-range bathroom remodel will return 72.7%, a high end remodel will only return 63.9%. If you undertake a high-end bathroom remodel, understand that you are doing for your own enjoyment; you would be better off keeping your update modest. Surprisingly, adding a stone veneer accent to your home has pretty good return, too, at 93% return in the DC Metro area and 92.2% nationally.
Any decisions that you make to update your home should be viewed through 2 lenses; what kind of ROI will the project provide and which updates are you doing for your personal tastes and lifestyle. In my mind, it is all about being realistic and pragmatic when you make these decisions. That doesn't mean that I would advise against doing an addition to your home that may only appeal to you, but it does mean that I might advise you to proceed understanding that it might not add value to your home.
If you ever want advice about which projects will add value, and which may not, please let me know. I am happy to help!
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