Renovating with a Return on Investment in Mind: Where to Put Your Money
When it comes to renovating your home, it’s natural to want the best of both worlds: a beautiful space that also increases the value of your property. Not all upgrades are created equal, however. Some will recoup their costs at resale, while others will leave you in the red.
We’ve all heard the adage, "kitchens and bathrooms sell homes," and it’s true. These areas are essential for potential buyers, so it’s no surprise they offer some of the best returns on investment. According to the National Association of Realtors, a minor kitchen remodel can recoup up to 80% of its cost at resale. Key areas of focus include:
- Upgrading to modern appliances and fixtures
- Installing granite or quartz countertops
- Painting or replacing outdated cabinetry
But it’s not just about slapping on a fresh coat of paint and new appliance fronts. Buyers want functional spaces that cater to their needs. Consider reconfiguring your layout to create a more open feel, or adding extra storage to keep clutter at bay.
Bathrooms are another critical area for consideration. A mid-range bathroom remodel can recoup up to 65% of its cost, making it an attractive investment for homeowners. Key areas of focus include:
- Upgrading to a modern, low-flow toilet
- Replacing outdated tile with a neutral, spa-like aesthetic
- Installing a new vanity and mirror
Beyond the obvious, there are other areas of your home where investments can pay off. Here are a few often-overlooked upgrades with surprisingly high returns:
- Adding extra insulation: Not only will this save you money on utility bills, but it can also appeal to environmentally-conscious buyers. Return on investment: up to 117%
- Installing new windows: Energy-efficient windows not only save on heating and cooling costs, but they also let in natural light and add curb appeal. Return on investment: up to 73%
- Creating an outdoor living space: Patios, decks, and outdoor kitchens are all the rage. Not only do they add ambiance to your space, but they also create an additional living area that potential buyers will love. Return on investment: up to 102%
On the other hand, there are certain upgrades that might not be worth your while. These include:
- Installing a home office: With the rise of remote work, one might think a dedicated office space would be a top seller. However, this is often a subjective space that might not appeal to all buyers. Return on investment: around 54%
- Adding a swimming pool: While a pool might be a fun addition for your family, it’s often a turn-off for potential buyers who are concerned about maintenance costs and safety. Return on investment: around 43%
Ultimately, renovating with a return on investment in mind requires careful consideration of your goals, target audience, and local market conditions. A savvy homeowner who focuses on the right upgrades can reap significant rewards at resale.
