Sacramento Remodeling Costs vs Actual Home Value - What is your ROI?

When I speak with prospective sellers about the value of their home as we get ready to list it, I always review the recent comparable sales from the neighborhood to assist to determine the listing price. Often, sellers will tell me things like, "Well I saw that house when it was for sale, and even though it's the same floorplan, we have new wood floors. We spent $9,000 on the floors so our house is worth $9,000 more than the house that sold." Or " We put in a $65,000 swimming pool, so our house is worth $65,000 more than the house across the street." Nope, sorry, that is just not how it works. You can not just simply add the cost of the improvement project to the perceived value of the house...generally, and depending on the project, you will only recoup a percentage of the cost of the improvements to the actual "appraisable" value of the house. An appraisal is what a mortgage lender will use to determine the value of the house in order to lend money to a buyer who will purchase your home.

Certain home improvements will yield a stronger "return on investment" than others. The actual cost of the remodeling versus the actual increase in value of the home are two different figures. Obviously if you are a homeowner, your enjoyment of the upgrades you make to your home is really important, but you will never get dollar-for-dollar increase in your home's value.

Remodeling Magazine does a study every year regarding the home improvements that will give you the best return on the money you spend for the upgrades. Because trends are different regionally, they have separated different geographic areas in their report -- so here is the data for Sacramento specifically.

So what are the top 5 Sacramento home upgrade projects that give you the best return on investment (ROI)?

1. Replacing your front Steel Entry Door; the average cost to do this is $1,464, and the average actual value of this upgrade is $1,641 (112.1% ROI).
2. Replacing your Garage Door; the average cost to do this is $1,514, and the average actual value of this upgrade is $1,461 (96.4% ROI).
3. Wood Deck addition; the average cost to do this is $13,827, and the average actual value of this upgrade is $11,956 (86.5% ROI).
4. Minor kitchen remodel; the average cost to do this is $23,603, and the average actual value of this upgrade is $19,854 (84.1% ROI).
5. Window replacement; the average cost to do this is $14,431, and the average actual value of this upgrade is $12,016 (83.3% ROI).

You can read the full report here.