GoBankRates.com estimates that the average tax refund this year will total about $3,000. In a survey conducted by that organization, 10 percent of respondents said they plan to splurge on a vacation or luxury item when the refund arrives. But 9 percent plan to use that money for a “major purchase.”
Some homeowners may choose to buy a refrigerator or washer and dryer with that windfall. But an even better investment would be a home-improvement project that may add to the home’s resale value. For example, a siding replacement adds $12,119 to a home’s average resale value per Hanley Wood. Building a backyard shed can also boost the value of your home, especially if the prospective buyer has a shed-ready hobby and needs an artist studio or woodworking space.
“Replacing home siding has consistently ranked as one of the best projects for increasing a home’s value,” says Karen Alves, LP’s Brand Segment Marketing Associate for siding. “When you sell the home, you recoup more of your investment than with comparably priced renovations like window replacement.”
With potentially $3,000 in hand, a homeowner can go beyond a just-the-basics renovation to one that adds significant home value. Here are some idea-starters for how to use a tax refund for a home renovation:
When your refund check arrives, resist the impulse to buy those tickets to Tahiti or jewelry store bling. Invest that money into some remodeling projects that make your home more creative and increase the asking price when you sell.
When you’re re-siding your home, it’s important to consider how your design choices will impact your home’s resale value. While the material you choose can make a difference, the color of your home is a great way to add value and catch a buyer’s eye.