Whether you’ve just purchased a new home and it needs some updating, or you’ve lived in your home for many years and are ready for a change, renovations can make you feel better and happier with your home. The reality is some of those updates also add value when you are ready to sell.
As you take a look at remodeling your kitchen, bath or other areas, it’s good to know what kind of return you will get on each upgrade. Since budget is often the number one barrier when it comes to home remodeling projects, take some time to evaluate which remodeling projects you want vs. those that will pay off in the end. Luckily there is a resource we can use to determine which projects offer the best ROI each year. Since 2002, Remodeling Magazine has produced the annual Cost vs. Value Report. Armed with this information, you can make the best decisions with your budget.
In reviewing the 2019 Cost vs. Value Report, you can compare the value of typical remodeling projects. Based on information from more than 3,000 real estate agents and firms, the study is a valuable tool in understanding your ROI on home remodeling projects. The good news? Even the higher ticket items such as kitchen and bathroom remodeling projects, offer a 50% return on investment while adding a great deal of personal satisfaction for homeowners. Experts say sometimes it’s all about balancing what a homeowner will enjoy now and what will offer the most value in the end.
On a national level, it’s interesting to note several remodeling projects involving the exterior of the home such as a garage door replacement (number one on the list at a 97.5% ROI), siding replacement (number four on the list at 75.6% ROI), and the addition of a deck (number five on the list at 75.6%) are at the top remodeling choices in 2019. When it comes to the interior, minor kitchen remodels placed in the top five at 80.5% ROI, and bathroom remodels at 67.2% ROI. While not in the top five, major kitchen and bathroom remodels still offer a more than 50% ROI, and as some of the most used rooms, can contribute to a lot of enjoyment in the home.
Curb Appeal Wins in 2019
With nine of the top ten remodeling projects focused on exterior improvements, many of these curb appeal items will not only help you recoup your money spent when you sell, they will help draw potential buyers in initially. Replacing the garage door, vinyl siding, and stone veneer were big winners, with this cosmetic improvement yielding a 95% ROI when you go to sell. Many of these projects can make an older, worn out home look great in no time. Add in some improved landscaping (which can be easy and cost-effective), and you’ve given yourself some significant current and future value in your home.
What’s On the Inside Counts Too
While offering a lower overall ROI (50+% is still good!), kitchen and bathroom remodels are typically one of the most satisfying choices in renovation projects. As Millennial homebuyers are buying older homes, and an increasing number of Baby Boomers are looking to age in place, home renovation projects are on the rise. Real estate professionals also say appraisers tend to look at these rooms first when assessing a home’s value. Some suggestions include replacing old appliances with new (making sure they all match), consider custom cabinets, or reface outdated ones, and update flooring with newer, more durable options. Even simpler updates such as a new backsplash will add value.
With bathrooms, a complete renovation usually isn’t always necessary. You can tackle elements like adding new bathroom vanities, toilets and fixtures, and still get the look and feel of an update without breaking the bank.
Once you decide where to invest in your home, look for options for financing. How you finance your home renovation project is just as important as choosing cabinets, countertops, appliances, and flooring. So while cash is always the best option, there are a few “better than most” financing options you can use if your savings doesn’t quite cover the cost of your dream kitchen or bathroom remodel.