Home Renovations that Offer the Best ROI

Home Renovations that Offer the Best ROI

Home renovations can be a great way to increase the value of your home, but not all renovations are created equal. Some renovations offer a better return on investment (ROI) than others, meaning you're more likely to recoup the cost of the renovation when you sell your home. In this blog post, we'll highlight some of the home renovations that offer the best ROI for resale, so you can make informed decisions about which upgrades to invest in.

Kitchen Renovations

The kitchen is often considered the heart of the home, and it's also one of the most important rooms when it comes to resale value. A kitchen renovation can offer a high ROI, especially if you focus on upgrading key features like countertops, appliances, and cabinetry. According to Remodeling Magazine's 2021 Cost vs. Value report, a minor kitchen remodel can offer an ROI of 72.2%, while a major kitchen remodel can offer an ROI of 58.6%.

When planning your kitchen renovation, it's important to keep in mind the style of your home and the preferences of potential buyers. Neutral colors and classic finishes like stainless steel and granite tend to have broad appeal, while trendy or bold choices may turn off some buyers.

Additionally, it's important to consider the flow and functionality of your kitchen. Adding an island or upgrading your layout to create a more open concept can also increase the value of your home.

Bathroom Renovations

Like the kitchen, the bathroom is another area where buyers pay close attention. Upgrading your bathroom can offer a high ROI, especially if you focus on features like the shower, bathtub, vanity, and flooring. According to Remodeling Magazine's report, a midrange bathroom remodel can offer an ROI of 63.7%, while an upscale bathroom remodel can offer an ROI of 54.7%.

When planning your bathroom renovation, consider adding features that will make the space feel luxurious and spa-like. A rain shower head, heated floors, and a soaking tub are all popular features that can appeal to buyers.

As with the kitchen, it's important to keep the style and preferences of potential buyers in mind when selecting finishes and fixtures. Neutral colors and classic finishes like marble or subway tile tend to have broad appeal.

Outdoor Spaces

Outdoor living spaces have become increasingly important to buyers, especially in the wake of the COVID-19 pandemic. Upgrading your outdoor space can offer a high ROI and make your home more appealing to potential buyers. According to Remodeling Magazine's report, a wood deck addition can offer an ROI of 72.1%, while a patio addition can offer an ROI of 54.9%.

When planning your outdoor renovation, consider creating a space that feels like an extension of your home. Adding outdoor lighting, comfortable seating, and a built-in grill can all make your outdoor space feel more inviting and functional.

Additionally, it's important to keep your landscaping in good condition. An overgrown or poorly maintained yard can detract from the overall appeal of your home.

Energy-Efficient Upgrades

Energy-efficient upgrades not only offer a high ROI, but they can also save you money on your utility bills while you're still living in your home. Upgrading your home's insulation, windows, and HVAC system can all offer a high ROI and reduce your energy consumption.

According to the National Association of Realtors, a new roof offers an ROI of 107%, while adding insulation offers an ROI of 95%. Upgrading to energy-efficient windows can offer an ROI of 89% while upgrading to a high-efficiency HVAC system can offer an ROI of 85%.

When planning your energy-efficient upgrades, look for products with the Energy Star label, which indicates that they meet energy efficiency guidelines set by the Environmental Protection Agency.

Paint and Flooring

Paint and flooring upgrades can offer a high ROI at a relatively low cost. Fresh paint and updated flooring can make your home feel more modern and well-maintained, which can be a big selling point for potential buyers.

According to the National Association of Realtors, refinishing hardwood floors offers an ROI of 100%, while adding new wood flooring offers an ROI of 106%. Painting the interior of your home can offer an ROI of 107% while painting the exterior can offer an ROI of 55%.

When selecting paint colors and flooring materials, it's important to choose neutral, classic options that will appeal to a wide range of buyers.

Home Office

The COVID-19 pandemic has led to an increase in remote work, which means that a home office is now more important than ever. Adding a home office or converting an existing space into a home office can offer a high ROI and make your home more appealing to buyers.

According to a survey by the National Association of Home Builders, 63% of buyers say a home office is essential or desirable, and 37% say they're willing to pay more for a home with a dedicated office space.

When planning your home office renovation, focus on creating a space that's functional and comfortable. Adding built-in storage, a comfortable desk and chair, and plenty of natural light can all make the space more appealing to potential buyers.

Smart Home Technology

Smart home technology can be a big selling point for buyers, especially younger buyers who are comfortable with technology. Adding smart home features like a programmable thermostat, smart lighting, or a video doorbell can offer a high ROI and make your home more appealing to buyers.

According to a survey by the National Association of Realtors, 42% of buyers say they're willing to pay more for a home with smart home technology, and 18% say they're willing to pay a premium of 1-3% of the home's value.

When selecting smart home features, focus on those that are easy to use and have broad appeal. Voice-activated assistants like Amazon Alexa or Google Assistant are popular choices, as are smart thermostats like the Nest.

Basement Renovations

A finished basement can offer a high ROI and add valuable living space to your home. According to Remodeling Magazine's report, a basement remodel can offer an ROI of 63.6%.

When planning your basement renovation, consider adding features that will make the space feel like an extension of your home. Adding a full bathroom, a wet bar, or a home theater can all make the space more appealing to potential buyers.

Additionally, it's important to ensure that the space is well-lit and well-ventilated, as a dark or damp basement can be a turn-off for buyers.

When it comes to home renovations, it's important to focus on those that offer the best ROI for resale. Upgrading your kitchen, bathroom, outdoor spaces, energy efficiency, paint and flooring, home office, smart home technology, and basement can all offer a high ROI and make your home more appealing to potential buyers. By investing in these upgrades, you can increase the value of your home and make it more attractive to a broad range of buyers.

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