(Surprising!) Home Renovations With The Best ROI
Regardless of whether you plan to list your home for sale or would like to increase its value while enjoying a few upgrades, it’s important to know precisely what renovations will boost your home’s ROI (return on investment). While there are factors like what’s happening in the market, location, and timing, there are common renovations that usually provide a bigger return on investment than others.
Today, the expert real estate agents at Westerfield group will share the home renovations with the best ROI. While a bathroom and kitchen remodel make our list, many other items might surprise you. Many ROI renovations aren’t quite as glamorous as the spa bathroom remodel you might have envisioned. In fact, curb appeal seems to be a significant factor when calculating ROI projects.
Armed with data from the 2022 Cost vs. Value Report from Remodeling magazine and some market research, here are the home renovations with the best ROI.
1. Manufactured Stone Veneers
Adding contrast to your home by replacing vinyl siding with stone veneer siding on a section of your home is a beautiful ROI project. The average cost for this project is for 36 linear feet of sills, 40 linear feet of corners, and one address block. The materials include two water-resistant barrier layers and corrosion-resistant lath and fasteners.
Average cost: $10,386
Average resale value: $9,571
2. Garage Door Replacement
While it’s true that a modern kitchen and bathroom appeals to home buyers, a snazzy-looking garage door is also a heavy hitter in the ROI department. A new garage door boosts your curb appeal. If the outside looks well maintained and well-kept, a buyer will often assume the inside is just as well maintained. We calculate the garage door replacement estimate on the cost of removing and throwing away a 16 by 7 foot garage door and replacing it with a 4-section door with heavy-duty galvanized steel tracks with a motorized garage door opener.
Average Cost: $4,041
Average Return: $3,769
3. Minor Kitchen Remodel
Turning your cramped, outdated, or crowded kitchen into a modern, trending, and functional one is one of those home improvements that boost your ROI and enjoyment. Think of how your functional kitchen would make your life more enjoyable, from cooking to entertaining. Remember, buyers want to see themselves in the space and will also consider how this upgrade benefits them. Remember, a minor kitchen remodel doesn’t mean gutting it down to the drywall and starting over. Instead, think of small projects like replacing the existing appliances with more energy-efficient, newer ones. Instead of replacing all the cabinets, try refinishing the existing ones. If your kitchen is small, consider adding hooks or a pegboard to help create more space.
Average Cost: $15,000
Average Return: $14,600
Maybe you don’t have a garage door to replace or like the look of stone veneers? Not to worry, landscaping is also an excellent way to get the biggest bang for your buck. Renovations that contribute to curb appeal tend to have excellent ROIs. Typically, your landscaping choices are one of (if not) the first thing buyers see. However, you don’t need to go crazy; many of the best landscaping designs are simple and clean—for example, fresh mulch in weeded flower beds with perfectly cut green grass adds curb appeal without much work. Ideally, your landscaping should say “hello, beautiful” without saying, “I require a lot of maintenance.”
Average Cost: $4,900
Average Return: $4,900
Remember, the cost for landscaping varies greatly depending on the type of project, the material used, and the location. In general, landscaping yields a 100% ROI. Below is an average cost calculated from national averages.
5. Minor Bathroom Remodel
What list of ROI for home resale would be complete without the bathroom on there. Yes, kitchens and bathrooms really do help sell homes. Instead of doing a small remodel in each room, it might be more beneficial to put all your money towards completing a minor remodel in each bathroom. Giving your bathroom an updated look goes a long way. Some ideas are replacing the shower head with a rain shower, replacing the old tub with a newer, improved model, replacing old vinyl with heated tile, updating the lighting, so the room is brighter, or replacing the vanity with something sleek, modern, and neutral.
Average Cost: $10,500
Average Return: $10,700
Bonus: ROI Tips on a Budget
Sometimes a large home renovation project just isn’t in the budget, and that’s completely alright. However, you can still make many small changes that will boost your ROI when selling. Here are several simple suggestions to help inspire you!
1. Paint the Entry Door
A new, fresh, popping coat of paint on the front entry door goes a long way and does not cost very much. In addition, it can add a pop of color to your house and boost that all-important curb appeal.
Average Cost: $175
2. Replace the Entry Door
If you have a little more money in your budget and want to take it a step further, replacing the front entry door can be an excellent choice. While it is simple, it can also be the most impactful. Your entry door is a key curb appeal factor, one of the first things buyers see, and it provides an important overall impression of your home. Do you have a modern, trendy front door that seems to say, “welcome!” or a paint-peeling, outdated door that you have to shimmy closed?
Average Cost: $1,410
Average Return: $1,280
3. Replace Light Fixtures to Match Door Knobs, and Cabinet Handles
Replace your light fixtures, so they all match and have the same sheen to match the overall look of your home. For example, metallic accents catch the eye, so installing metallic door knobs and kitchen cabinet handles in a shade that matches the sheen on your light fixtures will help tie each room together and give it a high-end look.
Cost varies considerably depending on your choice of light fixtures, door knobs, and cabinet handles.
4. Repaint a Few Rooms
Freshly painting a few walls is one of the easiest and more impactful ways to transform your home for resale. According to a 2012 HomeGain survey, choosing the right paint color and using it to repaint the interior of your home can give you a potential 107% ROI. Light, warm colors such as shades of whites, light grays, and creams painted can create the illusion of a larger, warmer space.
A Few More Tips
Luxury Entertainment Upgrades Are A No Go
Typically, a luxury entertainment upgrade won’t give a great ROI because they aren’t necessary for everyone and come down to personal preference. For example, a pool or hot tub, in-home theater, or backyard sports court isn’t something you need and might not be appealing to many of your potential buyers.
The exception to this rule is if you are selling a home in a very high-income area where people expect to see luxuries like this. Keep in mind what potential buyers desire in your neighborhood.
Keep any home improvements in context. It tends to be the default to say, “let’s upgrade the kitchen or bathroom!” However, a kitchen or bathroom upgrade is dependent on what condition your bathrooms and kitchen are already in. You want to know what styles are selling in your community and market.
In addition, try to follow this general rule of thumb. Never spend more than 10% of your home’s value to remodel your kitchen, and never spend 5% of its value to renovate the main bathroom.
Somethings to Ask Yourself
- Is my renovation plan “trendy” or personal and customized to my unique tastes?
- Will these upgrades work with my neighborhood’s “normal”?
- Is my renovation adding square footage?
- Is my renovation making my house more functional?
- Am I choosing materials, appliances, and finishes that are well-priced?
- What is the primary motivator behind this renovation? My own quality of life or resale value?
- How long do I plan to stay in this house before moving?
We hope you found this list of home renovations with the best ROI helpful! Remember, while the items on the list are the best home improvements for resale purposes in general, they might not be the best resale improvements for you. Your budget and location have a significant impact on resale value. It’s always a great first step to talk to a trusted real estate agent who is savvy with the market before starting a potentially costly remodel that might result in a low ROI. If you live in the Southwest Florida area and want to get the best bang for your buck, contact Jim Westerfield today!