Best Return on Investment Renovations

A common question realtors get is, “Which renovations will give me the best return on my investment?” This is a great question. Not all home improvements will add value to your home. For example, a swimming pool rarely offers any value. When it does, it is nowhere near what it will cost you to install it. Solar panels might improve buyer opinion but will not increase a home’s appraisal price. What renovations are worth the investment? Here are 5 improvements you can make to your home that will wow buyers and increase its worth.

KITCHEN

Research shows that homeowners can expect to recoup anywhere between 50%-80% of their kitchen renovation costs. This makes it a fantastic choice for a fixer-upper project. Many people spend a considerable amount of time in their kitchen each day. It makes sense that buyers and appraiser alike place high value on an updated kitchen space.

Easy Updates

A kitchen renovation project can be as minimal or extensive as you’d like. Many kitchen renovations or updates don’t even require a professional. Changing out the hardware, updating pendants, plumbing, or light fixtures, and giving the room a fresh coat of paint are all small-scale changes that will still yield results.

For another easy update, consider your appliances. Updated appliances will change the look of your space and will be one less thing a buyer will have to consider repairing or replacing themselves. This makes an appliance update a worthwhile improvement for both the buyers and the sellers.

Larger Changes

If you are not looking for a complete remodel, but want more extensive changes, think about updating your countertops, cabinets, and backsplash. Countertops can be replaced with updated materials like granite or quartz. Outdated cabinets can be refaced to resemble something more trendy or timeless. A backsplash can be added to elevate a space. When showing homes with these larger changes, my buyers will often comment on them. These larger changes do not go unnoticed.

Complete Overhaul

The above changes might be sufficient to improve your space. Sometimes, however, kitchens need a complete overhaul, and in hot housing markets especially, may be an investment worth undertaking.

Regardless of the size of the project, kitchen renovations consistently generate a higher return on investment and should be at the top of your home makeover consideration list.

BATHROOMS

Bathroom renovations are another great update option. A bathroom renovation, on average, has a 50%-70% return on investment, which makes it comparable to kitchens. If it makes financial sense, consider making improvements to all bathrooms in your home. If you need to prioritize, choose the primary bathroom first. The primary bathroom is the one that is the most used and the one that buyers will focus the most on. Therefore, the value of improving it will be greater.

Start Small

Like the kitchen, you can improve your bathroom by making small, stylistic DIY changes. If you want to keep changes slight, modernizing the light fixtures and sink hardware, enhancing the mirror choice, and adding a fresh coat of paint will do wonders for the appearance of your bathroom.

A Bit Bigger

If you want to do a bit more, change out the vanity and the flooring. These options can be eye-catching and extremely practical. A different vanity can give you larger sinks, a surface that is easier to maintain and more storage. You can choose flooring that is more durable, appropriate for a room with high-moisture levels, and easy to maintain. Porcelain tiles and LVP are some of the most recommended choices. Depending on your skill level, you may be able to complete these updates sans contractor, making the return on investment greater.

Complete Demo

You also have the option to start from scratch with a complete demolition and remodel. Generally, a complete bathroom renovation costs less than a full kitchen remodel, and still brings a great return on investment. If you are making the changes for the purpose of selling your home, stick to choices that you think will be the most appealing to buyers. Stick to neutral options and choices that will attract the most buyers possible. The goal is to list your home at a higher price, increase its appeal and reap as much as the renovation cost as possible.

FRESH PAINT

Appraisers don’t take into account cosmetic changes like paint when determining the value of a home. However, painting a home’s interior maintains a high return on investment. According to a survey conducted by HomeGain, painting an interior offers a 107% ROI and is recommended by 94% of real estate professionals.

Why? Painting is one of the least expensive improvements you can make but can completely change the visual aesthetic of your home. Fresh paint can brighten up your space, create an updated, modern look, and can tell the story of a home that is properly cared for and well-maintained.

Which Colors?

Paint colors ebb and flow with trends. However, stick to neutrals to gain the highest value. Unless your buyer is considering your home for a renovation project themselves, it is safe to assume they would like a home with few updates or changes needed. One bright orange room might not be a deal breaker, but buyers can more easily visualize themselves in your home if the walls are painted a neutral color. Although grays are trending out, I still recommended neutral and warm shades of gray, white, and cream. Here are my top five neutral colors:

1. Sherwin Williams- Agreeable Gray
2. Benjamin Moore- Revere Pewter
3. Sherwin Williams- Alabaster
4. Benjamin Moore- White Dove
5. Sherwin Williams- Accessible Beige

Paint Priorities

If a whole-home paint refresh is out of budget, prioritize your entryway for a great first impression and any room that a buyer would want to immediately repaint themselves. This could mean a room with a huge painted mural, a room with extremely vivid colors, or a room that has seen better days. Fresh paint will increase allure and is the perfect property pick-me-up.

FLOORING

Flooring has one of the biggest impacts on buyers and is another advisable renovation project. Buyers seek flooring that flows cohesively throughout a home, is durable, and is easy to maintain.

Hardwood Flooring & Alternatives

Solid hardwood flooring, new or refinished, retains the best return on investment and is the most desirable option. For homes with concrete slab foundations, this is not always a possibility. A few alternatives are engineered hardwood, laminate flooring, and luxury vinyl plank flooring.

Engineered Hardwood Flooring

Engineered hardwood offers a similar ROI to solid hardwoods to their similar look and feel. However, the surface layer is more delicate and there are limited refinishing options. Engineered hardwood floors have a hard time keeping up with children and pets.

Laminate and LVP Flooring

Laminate and LVP flooring options are more budget-friendly and offer better durability and protection against water damage. As a result, they are an increasingly popular choice. Both options will not give you the same return as hardwood floors but will serve to update the look of your space. They will also offer buyers features that other flooring choices will not. Try to choose a flooring color and pattern that will serve to mask imperfections, marks, pet hair, and dirt.

Tile Flooring & Carpet

Tile flooring and carpet will not offer the same return on investment as the other options but are sill worth considering when updating your home. Tile flooring yields less of a return due to its costly nature but is still a preferred option for bathroom bases. Carpet is not as highly regarded as solid flooring, but if your carpet is stained and looks (or feels) dirty, even after a good cleaning, it could deter buyers and is worth replacing.

Updating your flooring can be an undertaking. However, it can add value to your home and impress your buyers, keeping it a significant selection.

LANDSCAPING

Landscaping improvements, depending on the quality, can increase your home’s value by as much as 10%. Curb appeal can make or break a potential buyer’s first impression of your home, and that makes landscaping a good choice to update.

Recommended Modifications

Here is a list of recommended landscaping modifications:

1. Add color using plants and flowers
2. Plant trees
3. Make sure your lawn is well-kept
4. Maintain fresh mulch
5. Improve drainage issues

If you want to elevate your outdoor space even more, update your front walkway, add lighting, install a deck or patio, or build a fire pit. These options will make your space stand out.

Advice

My number one piece of advice regarding landscaping updates is to make sure your choices will be easy for any potential buyer to maintain. You don’t want to create a visually attractive space that will be hard for anyone without a green thumb to maintain. Choose low-maintenance plants, trees, and flowers, a grass that grows best in your area, and materials that are easier to keep up with (composite deck vs. wood).

With a few improvements, you can turn your yard space into an outdoor oasis and earn back much of the cost you put into it.

If you are not updating your home to sell, but could sell in the future, be mindful of how your improvements will fare upon selling. Yes, you want to enjoy the renovations and updates you choose, but you always want to keep your home desirable for future buyers. Try to visualize your home from the lens of a neutral buyer to prioritize the projects that will pack the most punch.

As with any renovation you make, be mindful that return on investments can range, and that although the improvements mentioned typically fare well, you should never financially depend on recouping a certain amount. Consulting with a realtor can paint a clearer picture about the value a specific home enhancement yields in your location (see what I did there?). If you would like more information, please reach out here. I am happy to help!