When considering which home improvement projects to undertake, the potential return on investment (ROI) is often a top consideration. After all, homeowners want to ensure they're putting their money into upgrades that will significantly increase the value of their home. According to Renofi, the national average ROI for home remodeling projects is around 70%. In this article, we'll delve into the top home improvements that yield the best return on investment, as well as factors that impact resale value and ROI.
Average Return on Investment by Home Improvement Project
Before you begin any remodeling project, it's essential to have a general understanding of the potential ROI. Some projects might seem appealing but may not necessarily provide the best return when you're ready to sell. According to Remodeling by JLC:
|
Project |
Avg. ROI % |
|
Midrange Bathroom Remodel |
60.1% |
|
Minor Kitchen Remodel |
72.2% |
|
Major Bathroom Remodel |
54.8% |
|
Major Kitchen Remodel |
57.4% |
|
Garage Door Replacement |
93.8% |
|
Wood Deck Addition |
65.8% |
|
Replace Windows |
68.6% |
The most impactful home improvements for ROI
Revamping the kitchen
Kitchens are the heart of the home. A minor kitchen remodel can make a big difference, not just aesthetically but also in terms of the property's resale value. It's not always about a complete overhaul. Sometimes, just updating the cabinets or adding a fresh coat of paint can do wonders.
Giving a fresh coat to the walls
A fresh coat of paint is one of the simplest home improvements with a high ROI. Opting for neutral colors can appeal to a wider range of potential buyers.
Giving hardwood floors a new life
Refinished hardwood floors can drastically change the look and feel of a room, making it more appealing to most buyers. If you have hardwood floors hidden under carpeting, consider revealing and refinishing them.
Incorporating new mirrors
Mirrors can make spaces seem larger and more open. Especially in smaller rooms or areas with limited natural light, adding or updating mirrors can be a wise decision.
Updating the hardware
Simple upgrades like changing door knobs, cabinet handles, and light fixtures can add a modern touch to your space without breaking the bank.
Enhancing the exterior look
Curb appeal plays a significant role in attracting potential buyers. From a new garage door replacement to a general tidy up of the yard, exterior improvements can increase the home's appeal.
Landscaping the front yard
Garden landscaping, especially with low maintenance plants, can boost your home's first impression. Planting trees, bushes, and flowers out front can create a welcoming environment.
Making every space count
Creating functional spaces in overlooked areas, like under the stairs or corners, can add more value by increasing usable living space.
Taking advantage of every level
Leaving an attic or a dark and dingy basement unfinished is a missed opportunity. Transforming these spaces into a warmer, functional area can be a game-changer in terms of ROI.
Overhauling the bathrooms
Bathroom renovations, whether major or minor, can drastically enhance the appeal of a house. From a simple bath remodel to adding a primary bathroom, it's an investment that most homeowners find beneficial.
Considerations affecting resale value and return
Current market conditions
The real estate market's current state, whether it's a buyer's or seller's market, can affect the return on home improvement projects. In a seller's market, where demand outpaces supply, even minor home improvements can yield substantial ROI as buyers compete for limited available properties. However, in a buyer's market, where supply exceeds demand, potential buyers may be more selective, and impactful, high-quality renovations might be necessary to attract attention. By keeping a pulse on the local real estate market and understanding broader economic factors, homeowners can make more informed decisions about which projects to prioritize.
Renovation duration
The longer a remodeling project takes, the more it might cost in terms of materials, labor, and other unexpected expenses, impacting the ROI. Delays can arise from a range of issues: sourcing specialty materials, waiting for permits, or encountering structural problems mid-renovation. Each day a project extends beyond its anticipated completion date could mean additional costs, whether from extended equipment rentals, increased labor hours, or alternative living arrangements for the homeowners. To mitigate these risks, it's essential to work with reputable contractors, maintain clear communication, and have a well-defined project plan in place.
Planning for the unexpected
Unforeseen issues or expenses can arise during home renovations, affecting the final ROI. Structural issues, outdated wiring, or hidden water damage are just a few surprises homeowners might uncover once walls are opened or floors lifted. While these issues often need addressing for the safety and longevity of the home, they can stretch budgets thin. It's always good to have a contingency budget in place, typically 10-20% of the total project cost, to ensure any unexpected challenges don't derail the renovation. Being financially prepared and anticipating potential hiccups can make the remodeling journey smoother and more predictable.
About The Marion Filley Team
For over three decades, Marion Filley and her dedicated team have been at the forefront of assisting home buyers and sellers in Connecticut. If you're looking to buy or sell a home or have any questions about the Connecticut real estate market, contact The Marion Filley Team today.
