Projects That Earn Their Keep

When considering a home remodeling project or building a new addition, one consideration should be the likely return on your investment. Even in the current housing market, the value of your home can be enhanced by the right home improvement. Though housing prices have slumped in recent years, the return on investment for home improvements has remained fairly stable.

Generally, home improvements that add to the curb appeal of your house offer higher returns when you sell. In the 2009 Realtor Magazine "Cost vs. Value Report", siding projects, replacement windows, and adding a new deck topped the list of best value-added projects, with kitchen remodeling rounding out the top ten.

Adding or replacing siding
In addition to improving the appearance of your house and reducing maintenance and upkeep, the right siding can provide additional insulation, reducing heating and cooling costs. Of the various kinds of siding, adding high-end fiber cement siding recoups most value when reselling your home, weighing at a return on investment of 86.7%.

Mid-range vinyl siding offers the next best return on investment at 80.7%, followed closely by high-end foam-backed vinyl. The most popular type of home siding, vinyl comes in a wide array of colors and finishes, allowing a custom look for your home.

Replacement windows
Generally, high-end vinyl windows outstripped traditional wood replacements, but all of these home improvement projects gave a return on investment of between 76% and 79%. Again, replacing your windows can also save you money on heating and cooling your home, making this home remodeling project a financially sound decision even if you don't intend to sell your home anytime soon.

Installing a deck can recoup 81.8% of its initial cost to build; these projects can add a great deal to your enjoyment of your home and yard, as well. Maintenance-free decks of pressure-treated wood last longer; these are usually constructed of Southern yellow pine, though cedar decks are also popular.

Kitchens and bathrooms
While minor cosmetic alterations are often cost-effective, larger scale bath remodeling was not one of the top projects for recouping the initial investment.

Making your home a more pleasant place to live is always the most important reason for a home improvement project. But when planning to remodel or add on to your home, the money you can recoup may help you decide which home improvement project is right for you.