The ability to project accurate, substantiated ROI for a customer is important for a contractor to earn their trust and business. It also allows contractors to target specific products and markets for their high return on investment. When a customer is considering spending a significant amount of money on a home improvement project, they want to know that they can recoup some of their initial commitment. For some, this is the motivating factor for doing projects themselves. For others, it justifies the extra expense of “doing it right”—hiring a professional to undertake the job.
According to a NAR survey, in 2013 53% of home buyers spent an average of $4,550 on home improvement projects within 3 months of purchase. The most common area of focus was the kitchen. 20% considered granite countertops very important and 17% wanted stainless steel appliances. However, new appliances and eat-in kitchens were the most desirable.
People were willing to pay the most for basements and in-law suites: basically, added space. 65% also considered central air conditioning the most important feature when selecting a home, making it the highest “deal-breaker” for buyers.
Remodeling Magazine’s Report on Cost vs. Value in 2013 also offers some great insight into what is important to home owners. It also indicates the “best” home improvements; the ones with the highest ROI (midrange).
1. Overall Highest ROI—Steel Entry Door
2. Adding Space
Attic Bedroom: Cost: $47,919 ROI: 72.9%
Basement Remodel: Cost: $61,303 ROI: 70.3%
3. Exterior Replacements
Roofing: Cost: $18,488 ROI: 62.9%
Siding (vinyl): Cost: $11,192 ROI: 72.9%
Windows (vinyl): Cost: $9,770 ROI: 71.2%
Windows (wood): Cost: $10,708 ROI: 73.3%
4. Kitchens & Baths
Kitchen Remodel: Cost: $18,527 – $53,931 ROI: 75.4% – 68.9%
Bathroom Remodel: Cost: $15,782 ROI: 65.2%
Hopefully, this information will help you overcome customer’s concerns about the “pay-off” of certain improvements, and ultimately earn their business.