What Renovations Increase Home Value the Most?
There are two key reasons why we decide to renovate our homes: 1) because we want our homes to be beautiful spaces we can come home to and relax in, and 2) to increase their value. Unless you’re flipping a house for profit, you’re likely interested in both.
So, which renovations will you see the best return on investment from? Read on to find out!
Which renovations increase home value the most?
There are a few key renovations that will (often) greatly increase your home’s value, and they’re in correlation with what’s more difficult to do, and what’s more expensive. Essentially, the more you can do to make your home move-in ready for the next owner, the higher its value. Here are some of the best renovations to complete if your primary focus is increasing value:
1. Bathroom renovations – bathrooms are surprisingly expensive and they’re also not something the average person can DIY. Most people see a 75% return on investment, though the true value of not putting off potential buyers is not calculated into this ROI.
2. Kitchen renovations – kitchens, like bathrooms, are another room most people can’t renovate on their own, and if potential buyers think that the kitchen needs replacing, they’re going to want to knock $15,000+ off your asking price to account for it. This is especially important if your home isn’t in an affluent area where people often replace kitchens as soon as they move in. If you decide to replace your appliances before you sell, keep that in mind and negotiate them into the house sale to further increase the value of the home.
3. Outdoor structures and landscaping – there are a lot of people in the world who can’t easily visualize what a space could look like after renovation, and that goes double for outside spaces. Most people will move in and simply mow the lawn once a week, so any outside structures (such as decks, workshops, fire pits, and the like) and easy-to-maintain plants and foliage will increase the value.
4. Replace or renovate old, outdated windows – most modern windows are energy-efficient, increase security, and reduce outside noise, which are all things potential buyers will be worried about if you have the home’s original windows. This can be a costly exercise, but buyers are becoming more energy-conscious and will likely be put off if the windows of the house are seriously outdated.
5. Roof renovations – if your roof is looking the worse for wear, updating it can seriously increase the value of your home, not to mention protect the home against damage. A new roof will give your home a “notice me” factor if you do decide to sell.
6. A finished basement – if you have a basement, simply having it finished, even if you don’t plan to use it, can add significant usable square footage to your home, and increase its value. Basements usually cost $50-$90 per square foot, so you can use that as a guide when budgeting.
7. Fresh, neutral paint throughout the home.
8. Replace old, tired floors, if necessary.
9. Replace old and outdated doors, such as garage doors.
10. Replace or renovate outdated siding, or repaint the exterior – though sometimes all it needs is a good jet wash!
11. Up-to-date insulation, especially in the roof.
12. Up-to-date, energy-efficient appliances.
13. Quality security and safety measures.
14. A clean and clear driveway – simply weeding, adding a new bag of gravel, or fixing broken or cracked areas can give your home a polished look that increases the value.
15. Smart storage solutions – if you have a garage, pantry, or large closet, consider adding smart storage solutions that make it easy to store more and access it more easily. These are things people will pay more for, yet often won’t think to install themselves.
How much does a renovation increase home value?
This depends on which renovations you decide to do, what condition the property was in before you started renovations, and how sought-after the area is.
Savvy house flippers will often buy a house in bad cosmetic condition (but one that is structurally-sound), renovate the inside completely, and sell it for a big profit, just a few months after purchasing it. You can see all types of these examples on HGTV!
The best way to know how much your home value may increase is to look at other properties in your area that are for sale. Ideally, look at homes that have sold within the last 12-18 months, especially ones that are in the same condition as your home currently, and those that are in the condition you hope for it to be in once you’ve renovated.
This is not only a great way to accurately guess the price you may get for your home, but it is a solid method for giving you an idea of how much it is wise to spend on your renovations.
Which kinds of renovations add value to a property?
If the home is outdated, almost any renovations will improve the home value. We covered the renovations that add the most value above, but if you don’t have a five-figure budget for your renovation, don’t panic.
Simply replacing old flooring and painting walls can do wonders. You can also consider taking out some walls to give a more open-plan feel, which is still incredibly popular in most styles of homes.
What home improvements add the most value in 2021?
According to the 2020 Cost vs. Value Report by Remodeling Magazine, a trade publication, the improvements that recoup and add the most value are:
· New wood flooring – recoups 100-106% of costs
· Garage door replacement – recoups 94%+
· Upgrading the external veneer or siding – recoups 96%+
Other improvements mentioned were small, easy-to-do cosmetic changes, such as changing light fixtures, paint refreshes, and installing new countertops. Even simply decluttering thoroughly, and tidying or cutting out clutter, can increase value during a home viewing or open house.
What comes first in a home renovation?
This depends a little on what you plan to do, but essentially, you start with the largest changes and work to the easiest, especially if you also need to live in the home during renovation. It’s easy to lose steam, so it is recommended to start with the biggest and most expensive parts of your renovation.
Which adds more value: bedroom or bathroom?
Bathroom renovations will add more value, provided your bathroom needs a face lift. If your bathroom is cosmetically and structurally good, and is fairly “bland”, but just not to your taste, it may not be worth it.
However, it is nearly always worth doing a bathroom renovation because it’s an area of the home that new buyers won’t want to renovate (unless they bought the property cheaply and intend to renovate it). Bedrooms, on the other hand, are a very personal taste and it’s likely the new owners will redecorate.
How do you price home renovations?
According to Home Advisor, the average home renovation costs between $10 and $60 per square foot, though this completely depends on which renovations are necessary and the finish you intend to achieve.
Remember to consider the home’s maximum value when you’re choosing the finish. You may like the idea of using marble throughout the home, but if the home has already reached its maximum value, then it just doesn’t make sense to do so.
Which rooms should I remodel before selling?
Remodels, in the truest sense of the word (tearing out the old and moving the layout) before selling isn’t often a good idea. You will nearly always spend more money than you can recoup, with a few exceptions.
Before you grab your sledgehammer, call an experienced realtor in your area and ask them what they think you should or shouldn’t do. In most cases, they’ll advise a light renovation (such as a lick of paint and new “cheap” carpet) and dressing (where you arrange the home in an appealing way to sell the home) so you can get it on the market quickly.
What are the best home upgrades for equity?
Any of the renovations we’ve touched on thus far will help you increase your equity, but you can also consider installing smart home features, finishing the attic, upgrading the air conditioning, and anything else that will make a new owner’s life easier and more cost-effective.
Is it better to renovate before selling?
Sometimes, but not always. It depends on the area you’re selling in and the kind of properties you’re in competition with.
You should also consider the costs of hanging onto the property for longer, as you’ll have to pay for utilities, tax, and maintenance on top of any renovations you decide to do. If the home is in a sought-after area, and you have a little bit of a budget, replacing anything broken or seriously outdated, as well as adding a new coat of paint (neutral shades are best) and replacing shabby floors will make a big difference.
What do appraisers look for?
There are 11 key things appraisers are looking at:
1. The general condition of the home
2. The home’s location
3. The age of the home
4. The home’s exterior condition, including the roof
5. The design of the home (updated or outdated)
6. Signs of damp, mold, or water damage
7. The size of the home
8. The structural condition of the interior of the home
9. Recent home improvements and eco-friendly features
10. Signs of past or present pest infestations
11. Safety and security features
Are kitchen remodels worth it?
Kitchen remodels are absolutely worth it if you’re planning to live in your home for years to come – it can be incredibly disheartening to walk into a kitchen that gives you negative feelings.
However, if you’re planning to remodel and then sell the home, it’s best to talk to a realtor to see whether or not they think it’s a sound investment, or whether you should leave that for a future owner. If you plan to rent the property, then again, a remodel is likely a good idea.
Do fences increase property value?
Generally, yes, fences will increase the value of a property. It does depend a little on where you live and more importantly, what the fence looks like, but a fence helps define the property edge and keeps children and animals safe.
If you’re thinking of putting in a fence, make sure you consider what it looks like and the quality, not just the function.
How much should you spend on renovations?
If we go back to considering the value of the other homes in your area, then you can calculate how much money you can put into renovations before you start to lose money. There’s no amount you “should” spend, but you can definitely spend too much.
Look at homes that have sold in your area that are in a similar condition, and then look for homes that are in a similar condition to the standard you’d like to renovate to. This lets you calculate the difference.
For example, say you find a few homes like your home that sold for around $420,000. You then find homes in the condition you hope to renovate your home to, and find they sold for $455,000. You could spend up to $35,000 before you’d likely start losing money. This of course, is an idea for how to make an estimate.
Property renovations can greatly increase the value of your home, but you should always be careful if you plan to renovate or remodel with the sole purpose of selling your home.
The professionals who buy old, tired homes, and then renovate, get to sell at a profit because they have an art of knowing what makes the biggest difference. They know where to be saving money, where it counts, and how to move quickly. They would even probably say that no one should bite off more than they can chew, in the same type of process.
If in doubt, always speak to a local realtor who will be dialed into what is and is not worth doing to your home, to increase its value.
If you’re considering a kitchen renovation or remodel, we’re here to help! We help homeowners get the kitchen of their dreams for around 40% less than it would have cost them had they gone through a traditional architect. Our 4-step process makes getting a new kitchen a seamless process:
1) We take accurate measurements with one in-person 3D scan visit
2) We generate kitchen renovation layout options with our proprietary AI-enabled kitchen design technology
3) You can work with our kitchen designers to get that Instagram-worthy kitchen you’re dreaming of
4) We work with our vetted contractors to complete your kitchen renovation or remodel, so you don’t have to become a project manager!
There is no better time to start learning more, or jump right into and starting your Skipp renovation estimate today.