Home renovations that boost your home’s value
The time comes in every homeowner’s life when they must ask the question: should I renovate? While your decision to remodel may be based on personal style and preference, many others choose to renovate to increase their home’s value and make a profit when it comes time to sell. But not all renovations produce the same return on investment (ROI), and some may even end up costing you money in the long run. To help you decide whether or not to renovate, here’s a list of projects that will pay for themselves (and those that won’t).
Updated bathrooms are a hot item for potential buyers — and adding extra bathrooms can increase the value of your home — but that doesn’t mean you’ll recoup all of the money you put into them. In fact, homeowners typically only recover 58% of their costs from bathroom renovations, which tend to run around $26,000. So, should you avoid a bathroom remodel or addition altogether? Not necessarily, but be smart about it. Make the necessary cosmetic and structural upgrades, but avoid unnecessary luxury items that will drain your wallet. Keep in mind that your renovations should be appropriate for the style and price range of the home. A luxury bathroom will seem out of place in a small starter home, whereas it may be expected in a high-end property.
Master Suite Expansion
Unless your master bedroom is tiny, adding or expanding a master suite is not the best use of your resources. And it’s a definite no if you’re planning to eliminate a bedroom or bathroom to make room for the expansion. More bedrooms and bathrooms equal a higher house value, so be sure not to sacrifice those rooms for the sake of a master suite. Plus, it only yields about a 53% cost recovery at resale, and potential buyers may just see it as unwanted space to fill.
New Wood Flooring
For a project that will reap a bigger return, install new wood flooring or refinish existing wood floors. They are more desirable to buyers, especially compared to new carpet, as they’re easier to keep clean and improve the aesthetic of your home. What’s more, you’ll get back roughly 91-100% of your costs.
It’s not all about the interior when it comes to increasing the value of your home. Installing new roofing not only appeals to the majority of buyers, but it also provides the biggest ROI. A new roof typically costs $7,600, and with a cost recovery of 105%, you’ll make that back plus a little more.
Who doesn’t love shiny new appliances and granite countertops? Potential buyers will, but they come with a pretty hefty price tag that may not be worth it. A major kitchen remodel can cost anywhere from $30,000 to $60,000, according to the National Association of the Remodeling Industry (NARI). And with only a 67% ROI, a serious renovation might not make sense unless you plan to live in your home for a long time. If you are planning to sell and need to make some upgrades, consider improvements you can make that aren’t over-the-top. While new appliances may be a must, a fresh coat of paint and new hardware on cabinets can make them look as good as new.
Data according to the 2015 Remodeling Impact Report by the National Association of the Remodeling Industry and the National Association of REALTORS®.