It’s the fundamental question facing anyone who has ever embarked on a home renovation: will my work produce a return when I sell my house? What you’ll get back on your investment depends on the value of your home, the value of homes in your immediate neighborhood, the housing market where you live, how soon you sell after making improvements, and the quality of the project itself.
Despite this, some renovations are fairly dependable in producing a return on investment, and follow-through can be easy with personal loans or a home equity line of credit.
If return on investment is important in your renovation project – i.e., you’re looking to sell soon or not stay for the long-term in your home – then these five home renovation ideas are generally considered best return for your investment:
- Kitchen remodel
- Bathroom remodel
- New flooring
- Garage remodel
- Landscaping upgrades
1. Kitchen Remodel
According to Remodeling magazine’s annual analysis of cost versus value, a kitchen “face-lift”— painting, refinishing surfaces, and upgrading appliances — will produce more return on investment than a full redesign. The key to spending less is spending wisely.
The same holds true for smaller projects, too. For example, when choosing kitchen cabinets, countertops, and flooring, aim for classic or neutral colors and styles. That’s not to say that granite counters don’t pay off. As a general rule kitchen remodels continue to be one of the best investments you can make in your house.
2. Bathroom Remodel
Bathroom remodeling is another best investment for your return on investment. “People buying a house look first at kitchens and baths,” says Kermit Baker, director of the Remodeling Futures program at the Joint Center for Housing Studies at Harvard University. While these rooms can be the most costly to redo, they’re more likely to pay for themselves. Adding rooms, such as a family room or master suite, also tends to fare well at resale time: Bigger homes command higher prices.
3. New Flooring
Flooring, somewhat surprisingly, is a part of your home that usually makes the strongest first impression, and will help your home sell faster. When you walk into a home, you may be struck first by the flooring rather than a little dent in the hallway wall, or the specific style of windows. If you want to grab people’s attention at their first step when they enter your home: it’s flooring.
Nice hardwood flooring is a solid renovation that will also help sell your home faster. You can also put in tile or ceramic for as little as 50 cents a square foot, and it, too, is highly desired in homes today. With patience and the right rental tools, you can install ceramic tile yourself. Remember, people aren’t shopping for fixer-uppers if they’re buying resale; they want to move in and get settled. When the floors look good, you may have your sale faster than you thought.
4. Garage Remodel
Having an existing garage always brings value in the resale of your home. According to Remodeling Magazine’s national Cost vs. Value Report, the average return on investment of a basic freestanding garage addition is about 63.7 percent. This means that if you spend the national average of $48,806 on a midrange 26-by-26-foot two-car garage, this would add about $31,091 to your home’s resale value. However, the more upscale your garage addition, the lower your percentage return. Upscale garages that include specialty storage units, upscale flooring and trim packages create a typical return of about 55 percent.
Expanding your existing garage space to increase value may depend on how your garage is currently framed. An architect or structural engineer may be needed to come up with a framing plan that won’t put any stress on the existing structure. A garage addition might be cheaper than other home additions but the question is whether the value justifies the cost for additional space that will only be used to store cars and personal items.
5. Landscaping Upgrades
Even in hot housing markets, the old saying holds true: If people drive by your house and are unimpressed, they’re less likely to stop and walk inside your home.
Make sure the curb appeal is strong. Most realtors will suggest adding a front porch to create interest to the exterior of a flat house, for instance. Convey a sense of welcome. If all the remodeling is on the inside but the outside of the house is challenging, you might never get the chance to show the inside.
Sometimes you just have to do what makes you feel good so you can enjoy your home right now. But, if return on investment is important to you, make sure to choose your remodeling projects wisely.
