by Morgan Q
Home renovation is a great way to add value to your home. But before you break out the hammers and nails, it’s important to consider the return on investment (ROI) you’re getting for your project. You’ll need to consider the current value of your home, the average property value of your neighborhood, how soon you’ll be able to sell based on your housing market, and the quality of your renovations.
For instance, if your home is valued at $150,000, installing a $15,000 stove doesn’t make much sense. Likewise, adding a six-car garage is ridiculous when your home only has one bathroom. Approaching renovations strategically will help you get your money’s worth, whatever your budget. Here are the five home improvements that will give you the best return on investment:
The best return on investment you can get for your renovation budget is basic upkeep and maintenance. It’s not as sexy as a kitchen update or a new bathroom, but buyers don’t care how pretty your kitchen is when the roof is leaking.
Before you invest time and money into a renovation, make sure to examine your home for any obvious maintenance issues like damaged siding, old insulation, or leaks in your roof. Siding replacement had a 92.8% ROI according to a study done by Remodeling Magazine, while new roofs and windows recouped about 80% of their cost.
2. The Kitchen
You can tell when money has been well spent in a kitchen. Upgraded appliances, all-wood cabinets, stone countertops, and hardwood flooring make your kitchen feel homey and luxurious – and add tremendous value. A minor kitchen renovation (meaning around $15,000) has an average return on investment of 92.9% – the highest return on investment of any cosmetic renovation.
3. The Bathroom
Other than the kitchen, bathrooms may be the room where we spend the most time and they bring almost the same return on investment for renovations – around 92%. The best upgrades you can make for today’s market are big walk-in showers. People just don’t have time to take baths anymore, and whirlpool tubs are seen as a waste of square-footage.
But before you jump into a full-blown remodel, consider your home’s layout and square-footage. Older homes are charming, but if you only have one bathroom, your money is better spent adding a second than renovating the one you have. A study by the National Association of Realtors found that adding a bathroom to your home can increase the sale price by 8.7% – twice the rate of adding an extra bedroom.
4. Curb Appeal
If all your remodeling is focused inside your home, but the exterior needs updating, you may never get the chance to show the inside to potential buyers. Your want your home’s exterior to be inviting. Minor landscaping can have a huge impact on the appearance of your home’s exterior, while major projects can add thousands of dollars to your sale price.
Adding a deck to your home has anywhere from 65%-90% ROI according to HGTV. The percentage you net will depend greatly on the quality of the deck you install, and how well it matches the style of your home.
5. More Space
The National Association of Realtors found that every 1,000 square feet you add can increase your home’s value by over 30%. Additional bathrooms have the highest return on investment, but attic bedrooms, sunrooms, and additional family rooms all had a return rate of 70%-80%.
One thing to remember before you start any renovation: Don’t add and upgrade so much that you out-price your neighborhood. You never want to be the leading value in your neighborhood – it can make your home impossible to sell. Shoot for being in the top 20% instead.