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Updating your home can help you revitalize your space and customize it to your specific needs and taste. Home renovations can also add tremendous value to your home and therefore help you build home equity. When narrowing down which home renovations to tackle, consider which projects will provide the most return on your investment (ROI).
Maybe you envision an updated kitchen, an outdoor living space with a deck or pool, or a remodeled bathroom. However, each project can add up quickly which is why it’s important to have an estimate of what kind of return you can expect from each project. According to hgtv.com, here are the home updates that pay off the most:
Exterior projects
While the interior of your house is the part you’ll get to enjoy the most, the exterior will provide curb appeal and will help entice prospective buyers
Landscaping
Adding some plants and trees to the exterior of your home is a great way to increase curb appeal. The average return at resale is 100%. There are many approaches to take when landscaping your house. You can choose longer term plants like trees, bushes and perennials that will continue to provide landscaping year after year, or you can get annuals that you can change out year after year to determine what you like best.
Exterior Improvements
Upgrading or repainting the siding of your home yields about a 95 percent return at resale. You can also remove awnings or various other decorative features to change the look of the house at a low cost.
Outdoor Living Space
Adding a porch, patio, or deck can help you regain about 90 percent of the cost of building the features. You can even add some cosmetic touches like plants, string lights, and outdoor furniture to make the space seem inviting. Keep in mind that run down or dangerous outdoor spaces can lose value, so if you can fix up your outdoor space before selling, it will work to your advantage.
Interior Projects
Bathroom Remodel
Depending on the extent of the remodel, your return on this may vary. For a minor bathroom remodel the average estimated return at resale is 102 percent. A major bathroom remodel, which involves changing the floor plan, yields about 93 percent.
Kitchen Remodel
Minor kitchen remodels yield about a 98 percent return at sale. It is considered a minor remodel when your kitchen needs a cosmetic update, but not a complete change in the floor plan. You may even be able to do some projects yourself like repainting the cabinets. A major kitchen remodel yields less of a return at around 91 percent return on your investment.
Convert the Attic into a Bedroom
Attics are known for being poorly insulated. Refinishing the insulation alone will help you save on your utility bills, but creating a new space in the attic like another bedroom or a home office can help add value to your living space. Fished attics typically get a resale value of about 93%.
Basement Remodel
A finished basement yields roughly a 90 percent ROI. Depending on the extent of the renovation, you may end up with a whole extra room and bathroom in your home. Just make sure that you have all of the proper drainage so you can avoid flooding and protect your new space.
Replacement Windows
New, energy efficient windows can save you money on your utility bills, but it will also yield an 89 percent ROI at resale if you live in a cooler climate. Warmer climates only see about a 62 percent ROI.
Family Room
Adding an addition of a family room or sunroom onto your house can yield up to 83 percent ROI.
Bonus Room
Upgrading a bonus room can help you gain back around 72 percent of your investment. Depending on who you think your potential buyer will be, it might be helpful to design an office to fit their needs, by turning it into an office, library, playroom, gym, and more.
Ultimately when it comes to upgrades, it’s important to consider your situation. If you are planning to remain in the same home for a long time, you can make design choices based on your style. If you are planning to sell your home, it may be wise to choose neutral or in-style colors so that the spaces appeal to potential buyers. Hopefully any improvements you choose to make will help you build equity in your home, and you will recoup most of your funds when you decide to sell.
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