Exterior Home Renovations Offer Greatest Value: Appraisal Institute
April 24, 2019 08:00 AM
CHICAGO (April 24, 2019) – The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today advised homeowners to focus on outdoor improvement projects when seeking to improve their home’s value.
“The latest research shows that home renovations focused on the exterior of a property are most likely to generate a positive cost-to-value ratio,” said Appraisal Institute President Stephen S. Wagner, MAI, SRA, AI-GRS. “However, not all home improvement projects offer a full return on investment – cost doesn’t necessarily equal value.”
According to Remodeling magazine’s most recent Cost vs. Value report, the projects with the highest expected return on investment are garage door replacement, manufactured stone veneer and siding replacement. Other projects with potential payoffs, according to the report, are deck addition, steel entry door replacement and minor kitchen remodel.
It may be best to hold off on big renovations if a homeowner isn’t sure how long they will be in their property. Regardless of cost, some home improvement projects can be worthwhile simply because they improve the owner’s quality of life.
Wagner encouraged homeowners considering improvement projects to compare the planned renovation to what’s typical in the local area.
“Renovations that move a property well beyond community norms are typically not worth the cost when the owner sells the home, and likely will be considered excessive” Wagner said.
For an unbiased analysis of what their home would be worth both before and after an improvement project, a homeowner can work with a highly qualified real estate appraiser – such as a Designated Member of the Appraisal Institute – to conduct a feasibility study. During a feasibility study, an appraiser will analyze the homeowner’s property, weigh the cost of rehabilitation and provide an estimate of the property's value before and after the improvement.
Watch the Appraisal Institute’s home improvement tips video to learn more.
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The Appraisal Institute is a global professional association of real estate appraisers, with nearly 18,000 professionals in almost 50 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Individuals of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designations. Learn more at www.appraisalinstitute.org.