Renovating your home with an eye toward its future value can help you recoup the costs of the project – and then some. Here are six home improvement projects that can increase the value of your home.
Kitchen Remodel
The area of the house that will give you the largest return on investment is definitely the kitchen. It’s often where realtors and interested buyers spend the most time checking out a new home. It’s also the common gathering area for many households, so a modern and pleasing area is appealing to many would-be buyers.
The most recent Cost vs. Value Report shows that a minor kitchen remodel involving cosmetic changes like new floors, cabinet fronts and appliances, can bring a return on investment (ROI) of 85.7%. To illustrate this, a kitchen remodel of $26,790 can add $22,963 to a home sale.
If you do go with a kitchen remodel, be sure to keep costs down. A major remodel, such as replacing cabinets, adding custom lighting, and expensive appliances, will likely not return as much as a more modest renovation.
Bathroom remake
Next up, the bathroom. Potential buyers tend to pay extra attention to these areas of the home when scouting out a house. Updated walls, floors, and bathroom fixtures can make your home more marketable. Plus, you can charge more for your home when remodeling bathrooms. According to the RenoFi Renovation Index, a mid-range bathroom remodel has an ROI of 64%, while an upscale remodel can net you a 56% return.
Upgrade your insulation
Improving your home’s insulation generally pays for itself when you sell your home, according to the Remodeling Impact Report. However, in addition to breaking even on the project's cost, your home will feel warmer each winter while lowering your energy bills until it’s time to sell.
Basement conversion
Converting a basement into a livable area can be another fabulous way to increase the value of your home. According to the National Association of Realtors, a basement conversion can cost an average of $57,500 and bump your home by $49,250 for an ROI of 86%.
Replace your siding
New siding will boost your home’s curb appeal and usually pay for itself. It can also help protect against leaks, mold, rot, and pests while improving your home’s insulation, too. The exact ROI will vary, depending on the material you choose: new vinyl siding can give you a 67.2% to 82% ROI, fiber-cement siding can get you 68.3% to 86% ROI and manufactured stone veneer can land you with 91.4% ROI.
Replace your roof
With a roof replacement being one of the most expensive jobs a homeowner can face, a new roof can significantly boost your home’s resale value. According to the 2022 Remodeling Impact Report, a new roof at $12,000 will quickly pay for itself. However, a more extensive metal roof, at $52,436, will only boost a home’s value by $28,196, netting you a 54.8% ROI.
What determines if a renovation will add value to your home?
In addition to the type of remodeling job, several other factors can determine if home improvements will increase the value of your home, including:
- The current real estate market
- Your home’s location and neighborhood
- Trending styles in home décor
- The quality of the work
- Materials used in the remodel
- Buyer preferences
Are there any home renovations that can decrease the value of my home?
Surprisingly, some remodeling projects can lower the value of your home. This includes highly personalized renovations that may not suit a prospective buyer’s taste. Another remodel that falls into this category is the destruction of a popular feature for one that may not be as desirable an option, such as converting a guest suite into a home studio. Finally, remodels that require ongoing maintenance, such as built-in electronics, maybe a minus on a buyer’s list.
When renovating, it’s also a good idea to ensure that your home improvements fit in with the general character of your home and the neighborhood. You don’t want the futuristic kitchen to stand out in a home still decked out in the elaborate décor of the ‘90s or your stucco-sided home to be the odd one out on a block of vinyl-covered homes.
While it’s fine to indulge your taste and preferences if you plan to stay in your home for many more years, if you anticipate selling in the near future, it’s best not to undertake a remodel that can lower your home’s value on the market.
Are you looking to fund a home improvement project through a HELOC? We have great rates and flexible terms. Call, click, or stop by an Elevate Credit Union branch today to get started!
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