Home Improvements ROI: What Renovations Are Worth Doing?
If you are thinking about renovating your home, you should improve parts that have high return on investment. Click here to learn all about what is worth doing.
Considering a home-improvement project? You’re far from alone. In 2018, U.S. homeowners spent approximately 318 billion dollars making upgrades and renovations. Whether you’re hoping to sell your home soon or in the future, some projects can make a big difference when you put it on the market. But how do you decide on the most cost-effective upgrades to take on? We have some tips for gauging home improvements ROI (return on investment) so you can invest wisely and recoup the cost.
Home Improvements ROI: What to Consider
Like any investment, deciding on the right home-improvement projects requires some careful thought. The ultimate goal is to offset the cost of your investment and maybe even make some money back when you sell your property. You don’t want to put down a lot of money on an upgrade that won’t pay off. Here are a few considerations to weigh to help you decide which renovations may offer the biggest bang for your buck.
Look at the Market
If you intend to sell your home in the future, you’ll want to be aware of your local real estate market before you make big changes. Taking on a major pool addition in the backyard may be more of a nuisance than an asset unless you live in a warm climate. Real estate is also influenced by trends and fluctuations in demand. Keep an eye on increased demand. This is when your smart upgrades can influence the overall value of your property.
Long-term Savings Opportunities
In some cases, a small upgrade like more energy-efficient windows or a new door could actually save you money in the long run. While the savings might not be dramatic at first, these kinds of changes can pay off over time. If you plan to stay for the foreseeable future, these upgrades can also improve the overall quality of enjoyment you experience in your home.
As design trends change, some features become outdated or impractical. If a layout change or addition to your home will improve daily living, chances are you’ll be happier. You may also have a better chance of selling your home at a competitive price than if you left the property the way it was when you first moved in.
Balance Project Scale with Value
Bigger isn’t always better, and that’s important to remember for home improvements too. A brand-new addition or dramatic kitchen remodel may have a large visual impact. But will it be worth it? Going over the top with large-scale renovations that make your home stand out from others in the neighborhood may not be a great idea. You may gain more interest, but that doesn’t guarantee you’ll edge out other nearby homes on the market. Don’t forget about the smaller and less glamorous changes that can generate interest and offers. Structural changes or small details like landscaping and exterior paint can make an impact when it’s time to sell.
Best Value Home Improvements
When it comes to best value home remodeling, there are some renovations that present the most value for your investment. You may be surprised at how minor some of these projects are. But the basic changes can actually have the biggest benefits.
If you think about it, the front door doesn’t seem like a huge consideration. But it is one of the first things potential buyers will interact within your home. According to Remodeling Magazine, swapping a front door with a steel replacement and new set of locks can offer an ROI of almost 75%. It offers a more refined and secure feel to your home and can increase curb appeal.
Another important door replacement involves your garage door. A garage-door upgrade can also up the overall visual appeal of your home. It also yields a larger return than an entry-door replacement — almost 98% ROI.
How much does a bathroom remodel add to value? These kinds of projects can make a big impact, especially in very competitive housing markets.Remodeling Magazine reports that a mid-level bathroom remodel can actually lead to a 67% ROI. More expensive and upscale renovations will cost more and generate slightly less savings at about a 60% ROI.
For many homeowners and potential buyers, the kitchen is one of the most central areas of the home. Many people spend a great deal of time in this room to cook meals and maybe even entertain family and guests. Kitchen designs are always changing, but making solid upgrades with new appliances, cabinets, and finishes could benefit your daily life and the market value of your home. Remodeling Magazine says that even a minor remodel of your kitchen could generate almost an 81% return.
Another exterior change that can have considerable benefits is a siding replacement. When you work with a siding contractor like GVD Renovations to replace your home’s siding, you can really upgrade the appearance of your home. In addition to strengthening the curb appeal of your property, this is one of the smartest investments you can make. According to Remodeling Magazine, the national cost average for this project is about $16,000, and the ROI is nearly 76%.
Other Worthy Home Upgrades
Beyond these main upgrades, you may consider some of these other renovation projects.
Exterior changes can enhance the look of your home. You can enjoy these improvements while you still live in your home. And when it’s time to put your home on the market, these features can draw potential buyers.
- Manufactured stone veneer replacements
- Adding a deck
- New roof
- New windows
According to the National Association of Realtors 2017 Remodeling Impact Report, these other interior renovations are most likely to up the resale value of your home:
- Adding a new bathroom
- Master suite addition
- New wood flooring
- HVAC replacement
Home upgrades can be a huge undertaking. Once you get a handle on home improvements ROI that make the most sense for you, don’t just stop there. Check our blog for the latest articles on selling your home, interior design pointers, and real estate investment trends.