If you’re planning some home renovations, you might be wondering which, if any, renovations will actually add significant value to your home. Maybe you’re planning on selling in the near future and want to maximize selling price. Maybe your family has grown and the space just doesn’t work as well as it used to. Or maybe you’re just ready for a change. Whatever your reason for wanting to renovate, remodel, or redecorate, you’re probably concerned that you’ll spend more money than you’ll recoup. Below, you’ll find a guide outlining which renovations usually make the most financial sense. I say “usually” because the market in which your house is located matters. Some renovation projects are worth more in certain areas of the country, or even in different neighborhoods within the same city. Your best bet would be to do at least a little market research in your area to determine what buyers in your area are looking for.
On the exterior, replacing cosmetic elements like the front door and siding tend to add almost as much value as you’ll spend, no matter where you live. In some cases, repainting can actually yield the same positive results as replacing and will definitely cost much less. Replacing would be a preferred option if the current front door and siding are old and worn enough to lack any energy efficiency.
Replacing windows and the roof with newer, more energy efficient models is another way to increase a home’s value. Prospective buyers will love that your improvement looks great and will save them money on heating and cooling bills.
Remodeled kitchens are still one of the best investments homeowners can make. Typically, you’ll see a return of over 80% of your investment. Many prospective buyers will overestimate how much it would cost them to redo a kitchen, which makes an outdated-looking kitchen a major turnoff. That’s in addition to the fact that many prospective buyers will want a move-in ready home, so anything they don’t have to do is a plus.
Remodeled bathrooms return similar yields. Again, many folks overestimate the cost of doing the job after they move in and just don’t want the hassle of remodeling added to the hassle of moving.
When it comes to adding rooms, most projects don’t return nearly as much as they cost. One notable exception is the addition of a second bathroom. Many buyers will be looking for at least 2 bathrooms, so adding a second one could be key to selling the property at a good price. The problem with adding a second bathroom that changes the footprint of the house is making sure that the bathroom “fits” the layout and doesn’t seem like it was just tacked on. It’s less expensive if you’re able to convert closet, bedroom, or living space into that second bathroom. A nice master suite is always attractive to buyers.
In addition to knowing what buyers in your area are looking for, it’s important to understand that having a $750,000 house in a $500,000 neighborhood really isn’t any better than having a $500,000 house in a $750,000 neighborhood. If your renovation is about making your home work better for you and your family, you should certainly feel free to do whatever makes you happy. Just understand that what constitutes an invaluable upgrade for you might not be worth a higher list price to buyers down the line.