The Smartest Home Improvements for Your Investment Dollar


“The surroundings householders crave are glorified autobiographies ghost-written by willing architects and interior designers who, like their clients, want to show off.” – T.H. Robsjohn-Gibbings (“Robsjohn-Gibbings Names the Biggest Bore,” Town and Country, January 1961)

My wife has a mile-long list of home improvements she wants done …

* “Honey, we could REALLY increase the value of this house by updating the kitchen with new countertops and cabinets.”

* “Steve, I KNOW that wives shopping for homes look at kitchens and master bathrooms. So we NEED to upgrade our bathrooms too.”

* “Steve, stand right here and imagine this with me … If we take out this wall and move the stairs, it’ll dramatically open up our living room.”

She’s talking to me in the right language. Instead of saying, “Won’t the kitchen look nice?” she phrases it in my terms — detailing what each project can do for the value of the house.

Is my wife right? Will we get our money out if we make a fancy master bath or if we update the kitchen? According to a recent issue of “Consumer Reports,” “remodeling and upgrading are generally poor investments.” In fact, the experts that the magazine polled say that when it comes to your own home, NO home-improvement projects, on the average, return more than they cost.

Still, it is your home — and you should make it the way you want it to be (if you can). So, what are the smartest renovations you can make? The magazine says, “You’ll get the biggest bang for your buck by keeping up with the Joneses, not by going them one better.

“Over-improvement yields diminishing returns. So don’t add an in-ground swimming pool or a third story if you’re the only one on the block to have one. Refrain from exotic decorating. [And] don’t undertake a big-ticket remodeling project if you plan to move within a year — you won’t have the time to enjoy it, and new owners will most likely want to do something different. Instead go for maintenance and repairs, clear clutter, and paint.

“Projects that should take priority are those that will protect your home from deterioration and damage: roof replacement, plumbing and electrical upgrades. Although such improvements don’t do much to beautify your home, they will help preserve its value.”

This surprised me, because these aren’t necessarily the things I think about.

For example, when a home inspector was excited about the electrical system in our current house, or a bit worried about the electrical system in our previous house, I wasn’t impressed either way — it didn’t particularly affect my buying decision. And my wife didn’t say, “Honey, did you see that electrical box?!”

But I’m not the expert here.

The kinds of improvements that most of us think about making are those that can be seen and will make us the envy of our friends, relatives, and neighbors. Here are the five improvements in that category that, according to “Consumer Reports,” pay the most (recover 50%-75% of their cost if the home is sold at least one year after the renovations are completed) — even though what they “pay” is still a negative return on investment:

1. major kitchen remodeling (average cost: $38,800)

2. bathroom remodeling (average cost: $9,500)

3. attic bedroom addition (average cost: $31,400)

4. master-suite addition (average cost: $63,300)

5. basement refinishing (average cost: $39,700)

So, armed with this knowledge, do you think I’ll be able to convince my wife that we don’t need to upgrade the kitchen?

Me neither …


Dr. Steve Sjuggerud is President of Investment  University which is tailored to make sure you walk away a more knowledgeable investor immediately – whether you’re a beginner or a stock market ‘veteran.’