The 5 Best—and 5 Worst—Home Improvement Projects for Your Money

Which jobs put you in position to recoup most of your investment at resale—and which don’t.

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The 5 Best—and Worst—Home Remodeling Projects

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4. Vinyl siding replacement: Homeowners who replace their vinyl siding recoup on average nearly 80 percent of the project's cost when they sell the home, according to the report. Alfano says the project's low costs—the job averages less than $11,000—deserves part of the credit for its impact. But curb appeal plays a significant role too. "New siding is going to make a house look brand new," he says. "It is going to really change the way the house looks from the street." In addition, vinyl siding is extremely low-maintenance and lasts up to 25 years, Alfano says. By comparison, houses typically need their exterior repainted every five to seven years, he says. "That's sort of a trend among homeowners and home buyers over the last five to ten years—moving toward low maintenance or low maintenance materials."

5. Wood window replacement: Homeowners who replace their wood windows recoup on average about 77 percent of the project's cost when they sell the home, according to the report. Zuch notes that window replacement projects can be appealing because they can make the home more attractive while increasing its energy efficiency. "Not only does it add value but it reduces your energy bills," Zuch says. At the same time, homeowners who make certain window replacements can qualify for federal tax credits. But Kuperszmid Lehrman cautions that the project's cost—of nearly $12,000—means homeowners shouldn't replace their windows simply to lower their energy bills. "It's just too expensive," she says. "The payback period—even with the federal tax credits—is still going to be pretty long." Instead, homeowners should replace windows if they are beaten up or broken and consider the project's energy efficiency benefits the icing on the cake.

The 5 Worst

1. Home office remodel: Property owners who remodel a home office recoup on average less than half of the project's cost when they sell the home, according to the report. That's because even though more people are working out of their homes these days, not all buyers want a space dedicated exclusively to work. "That space in your home—when your square footage is so precious—may serve your needs very well, but the next person might say, 'I need a bedroom, I don't need a home office,'" Lipford says. "And that specialized work that's needed in that home office just doesn't pay you back."

2. Sunroom addition: Homeowners who add a sunroom to their house recoup on average about 51 percent of the project's cost when they sell the home, according to the report. Like the home office, the sunroom represents an inefficient use of interior space, Zuch says. "If you are going to add a room, what people are looking for, especially now, is [perhaps] a mother-in-law suite with a universal design," Zuch says. "[Or] for a family that is growing, they want a nursery on the first floor [because] they don't want to climb stairs." Homeowners who are willing to sink $73,000—the average cost of a sunroom addition—into their house would be better off investing in a different home improvement project.

3. Bathroom addition: Homeowners who build a bathroom addition recoup on average only about 60 percent of the project's cost when they sell the home, according to the report. Lipford says the project's relatively low return on investment reflects its cost, of around $39,000. "When you are talking about a bathroom, you are talking about a footprint that has lots of plumbing, you still have your air conditioning, heating, you still have your electrical concerns, and you are putting in fixtures," Lipford says. "It doesn't matter how big it is because your concentrated square footage costs in that scenario are way up there compared to building a closet."

But Kuperszmid Lehrman argues that a homeowner's true return on this particular investment depends on how many bathrooms they already have. Homes with one less bathroom than comparable properties in the neighborhood would be better served by this project. "If you are a bathroom short, depending on what's going on in your neighborhood, then it is going to make more sense," she says.