It doesn’t matter whether you are planning on selling your home now or in the future, investing in home remodeling project requires looking towards their future benefits. When the day finally comes for you to sell your home and you find that you haven’t gained any of the money you’ve invested in converting a garage into a game room, you will undoubtedly regret your decision. Making sure that your home renovation projects add value to your property should be considered when making plans to start a remodeling project. Not all home improvements will cover their cost, or add value to your home. There are some projects such as a kitchen remodel or a bathroom remodel that will add numbers to the bottom line at the time of the future sale of your home. Let’s take a look at how ROI can affect renovations and which projects pay off the most.
Improvements Home Buyers Want
Real estate trends are the most important factor in determining the possibility of return on investment. Although they tend to change from year to year, some of the main desires of the buyers remain the same. Fortunately, keeping up with the developments on the real estate market is not that difficult today when all the information we need is just a click away. A simple Google search, some brain storming, and help from the most up to date home buying app to conclude which are the characteristics that contribute to the price of the property the most.
Home Upgrades that Bring the Most ROI
It is not only the type of project that determines how much money you may recover, but also the scale. In fact, according to the 2015 Cost vs. Value Report from Remodeling magazine, a major kitchen renovation with the average price of $56,768 can get you about 70 percent of that back, while with a minor kitchen remodeling project that costs about $19,226, you can recoup almost 80 percent. Some of the midrange projects that can boost your property value are entry door replacement, resurfacing the exterior with manufactured stone, garage door replacement, siding replacement and wooden deck addition. The two projects that are always appealing for home buyers are bathroom and kitchen remodeling. These are also two projects that can cause the biggest loses if not done right, so hiring reputable contractors is a wise thing to do.
Upgrades Home Buyers Don’t Want
You can put your heart and soul into a remodeling project, but if it doesn’t boost your home value, ask yourself – is it really worth it? According to realtors from Lifull the projects that are not appealing for buyers and that therefore recover the least money are the ones that are individualized for the homeowner, such as garage/bathroom/master suite additions. Buyers prefer less personal improvements that can be adapted to their lifestyle.
Renovation Projects to Avoid
Some of the projects that require significant investments, but do not contribute to the value of the home are backup power generator and sunroom. Home office was considered to be a value-boosting project, but when you think about it, not everyone carries work home. A pool can make the backyard look fantastic, but in the end, it will not bring you the return you expect.
How you Renovate is Important
Although a kitchen renovation is at the forefront of most home remodel projects that yield the highest return on investment, not all things in a kitchen remodel will yield the same ROI. If you invest thousands of dollars in the kitchen and make poor selections, it could adversely affect your efforts on selling the home and the actual sales price. You should make sure that the changes you make will appeal to the maximum number of people (avoid too striking designs like the ‘80s Memphis). A house that looks nice can not only sell at higher price, but also sell faster. And while you should beware of passing fads, the house should still be in accordance with the trends.
The last factor you should consider is the location. If the value of your house exceeds the average prices for your neighborhood, your remodeling efforts will probably not pay off. However, if your house’s value is below the average for that market, you will probably recover a larger part of the costs.