Which home renovations are worth splurging on depends on your goal for the project and your budget.  

If you plan to maximize the value of your home to resell it later on, consider investing in low-cost projects with a high return on your investment. On the flipside, if your goal is to create a space customized to your unique lifestyle, you might consider projects dedicated to increasing the comfort and use of your living space.

What home renovations are worth the investment?

The renovations worth investing in are ones that are necessary to get your home ready for a potential buyer. Depending on the current state of your home, this could mean completing essential repairs or refreshing the overall aesthetic of the home to a more timeless look.  

“Buyers want to make sure that when they’re purchasing a home, they’re not going to have additional costs,” says Jill Franks, lead interior designer and project manager of Freemodel—a California-based home renovation company dedicated to maximizing property values. 

There are several home renovations to consider that will increase the worth of your house, but finding one with a high return on investment will help you determine the best use of your budget.  

Build an addition 

Add a new bathroom

Average cost: $80,000

Average value: $50,000

Return on investment: 63%

The total cost of the project will depend on whether you want to add a full bathroom, which includes a tub or shower, or a half bathroom that doesn’t. Depending on how many bathrooms your home currently has and the ratio of bedrooms to bathrooms, adding an additional bathroom may make your home more comfortable to live in if you plan to stay a while, or increase the property value—especially if your home currently has only one bathroom. 

The cost also depends on whether you are adding additional square footage to your home through an addition or making space in your current floor plan. If you are able to find a way within your existing floor plan and the extra bathroom adds significant value to your real estate price, then it may be worth the investment, says Franks.

Add a new bedroom

Average cost: $172,500

Average value: $100,000

Return on investment: 56%

Similar to adding a bathroom, adding a bedroom is something that should be considered only if it increases your comfort or the property value by at least twice the cost of the investment, according to Franks. This is because of the time it takes to acquire a permit to build the addition and complete the project. 

This also is one of the most expensive home renovations a homeowner can undertake. But, if homeowners can find extra space within their existing floor plan to add an additional room, they may be able to cut down on the cost and timeline of the project which may make this worth the investment. 

Remodel your kitchen

Average cost: $80,000

Average value: $60,000

Return on investment: 75%

A major kitchen remodel often involves demolishing the existing kitchen cabinets and countertops and replacing it with an updated floor plan. This is more expensive than a minor remodel, which might be as simple as adding a fresh coat of paint and updating the hardware. 

If you plan to put your home on the market, a minor update might be just what your kitchen  needs to refresh the space so a potential buyer can envision themself in the home. But, one thing to keep in mind when selling is to avoid becoming emotionally attached to your personal aesthetics and stick with timeless colors and finishes so potential buyers can imagine themselves living in the home for a long time.

Remodel your bathroom 

Average cost: $35,000

Average value: $25,000

Return on investment: 71%

If your bathroom is limited in space, you can increase its functionality by renovating its current layout. This maximizes your existing square footage and is more cost effective than building an additional bathroom from scratch. Refreshing your current space can also add a unique flair to your home that makes it stand out compared to other listings on the market, says Franks. 

Remodel your basement 

Average cost: $57,500

Average value: $49,250

Return on investment: 86%

If you have an unfinished basement, you can significantly increase the value of your home by finishing the space. It increases your home’s usable spaces and can provide space to add an additional room in your home. 

This is also an opportunity to add an additional dwelling unit, such as a mother-in-law suite or a rentable unit. This project became increasingly popular during the pandemic as more people needed a separate space for their family members to move into, or were looking for an additional stream of income to supplement their earnings, says Franks. 

Revamp your home’s exterior 

New roof

Average cost: $12,000

Average value: $12,000

Return on investment: 100%

New garage door

Average cost: $2,000

Average value: $2,000

Return on investment: 100%

New vinyl siding 

Average cost: $18,300

Average value: $15,000

Return on investment: 82%

New fiber cement siding 

Average cost: $18,600

Average value: $16,000

Return on investment: 86%

Replacing your roof and siding often yields high returns on your investment because they are necessary repairs and can last for decades. You can also increase your home’s overall energy efficiency which lowers your utility bills. Switching out your garage door not only adds curb appeal,…

Read More: Should you renovate your house before selling?

2022-11-25 14:00:00

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