Summer is a popular time for home renovation that can improve your home’s comfort and livability. And depending on the workmanship, materials, and scale of the project, they’ll also most likely increase the replacement value of your home – the amount you should always be insured for.
No one likes increased homeowner’s insurance premiums. But if the worst happens to your house, you need to be able to afford to replace it to its previous state – including all the wonderful renovations you’ve done to make your house a home.
Some of the most common projects are:
Bathroom updates
Bathrooms are a major selling point for a home. According to Zillow, bathroom renovations increase the value of a home, but you may not recoup the entire investment when you sell. The advantage, though, is that the work is likely to increase potential buyer interest and traffic, and that can lead to a quicker sale and possibly more price competition. Zillow estimates the average cost of a midrange bathroom remodel (essentially upgrading floors and fixtures) is $19,000. An upscale remodel (with a new layout and higher quality surfaces) can set a homeowner back more than $60,000 on average. Sellers will recoup on average 70% and 56% respectively for the midrange and upscale work.[1]
Adding a backyard deck
In the 1950s and 1960s people congregated on their front porches and stoops. Playing in the backyard was for the kids. Nowadays, extensive back decks are the preferred outdoor living space for barbeques and other social gatherings. Homes.com estimates that a mid-range deck made of composite material will cost $17,000 while the same deck made of wood will cost $11,000. The payoff for both is in the 65-70% range upon sale of the home.[2]
Finishing a basement
Making the basement livable, whether for recreation, a home office, or an “in-law suite,” is another popular home renovation project that can add value to a home. Experts place the average cost of these projects between $5,000 and $9,000, depending on materials and the need for plumbing work. Homeowners can expect to get 70% of that investment back when they ultimately sell the home.[3]
A Final Word
You might be able to do some of these renovation projects yourself – at least certain steps. But when it comes to utility work (electrical, plumbing, gas lines, etc.), be sure to hire bonded and insured professionals. And remember to check in with your insurance representative to keep them posted on your plans and progress so you can have the peace of mind that the value of your upgrades is fully covered by your homeowner’s insurance.