There are many types of home renovations, from roof replacement to smart home technologies. Even finishing the attic qualifies home renovation.
But which ones have the highest return on investment when selling? That’s the million-dollar question among homeowners and agents. If you can get this part right, you can spend just a few thousand to add tens of thousands to your property value.
Fortunately, it’s not rocket science. For one, nearly all renovations add value to the property. A fresh coat of paint, for instance, costs only a few hundred but can increase your property value by thousands. Additionally, the renovations we often overlook tend to generate the highest return on investment.
4 Types of Home Renovations for the Highest ROI
According to real estate studies, the following are four main types of home renovations that generate the highest ROI.
They say first impressions are everything, and this couldn’t be truer in the real estate industry. Buyers tend to pay for the things that catch their attention the most when they first visit the property. This means that outdoor structures, including decks, fire pits, and pools, can make or break the sale. These structures also directly determine how much the buyer is willing to spend.
A few tips to consider here include improving the fence, deck, and swimming pool. A new fence conveys a sense of security and privacy while improving curb appeal. Fences have the most impact when selling family homes.
Decks and swimming pools aren’t cheap investments. However, they have a massive impact on sale prices. According to the 2021 Cost vs. Value report by remodeling.net, the average composite deck costs $22,400. But you’re guaranteed to recoup at least 60% of the investment. Swimming pools are just as expensive but guarantee an 80% ROI.
Upscale garage door replacement
It may not seem a fancy improvement. However, garage door replacements are ranked the highest ROI renovations today. On average, garage door replacements generate a 98% ROI, with many projects returning a profit on the investment. Indeed, according to the Cost vs. Value report mentioned above, 46% of garage door replacement improvements generate more than 100% in recouped costs.
The trick is to replace your garage door with one made from durable materials. Many homeowners prefer steel, wood composite, and aluminum doors. These are high-performance doors with excellent energy-saving qualities.
Another material that stands out is fiberglass. Fiberglass looks like wood but is way more weather-resistant. The best part is that fiberglass is also a lot more affordable than high-quality wood. It’s also less expensive than steel. If you’re not a fiberglass fan, the best alternative is wood composite, which is aesthetically pleasing and highly durable.
The kitchen is one of the biggest considerations for home buyers today. Many people consider it the heart of the home. Moreover, in most homes, the kitchen is a bustling center of activity where the family gathers to cook, socialize, and entertain. For this reason, the kitchen is one of the places many owners begin renovation projects.
The good news is that you don’t have to spend a ton of money on upgrading your kitchen. In fact, kitchen renovations with the highest return on investment are low-budget improvements that have a massive impact on the aesthetics and functionality of the kitchen. On the other hand, if you splash over $50,000 on kitchen improvements, you may not recover the investment.
Experts recommend setting aside around $26,000 for kitchen remodels to recover at least 70% of the cost. Replacements and upgrades to consider are new appliances, such as a new cooker and dishwasher. More energy-efficient models typically generate the highest return on investment. Adding a new floor can also generate significant returns.
Finally, bathroom remodels within a modest price range can also be extremely rewarding when looking to sell your home. The reason is the same as kitchens – modern homeowners consider the bathroom one of the most important parts of the home, unlike when the bathroom was at the bottom of the list.
There are many upgrades to explore here. The highest rewards often come from turning your modest bathroom into a modern, high-end one. You’re guaranteed to recoup at least 70% of the costs. Another option is to make the bathroom more accessible. This works like a charm if you eventually sell to a family where one member has mobility challenges. Older people aged 65 or more also prefer homes with accessible bathrooms.
Other bathroom upgrades to consider include flooring replacement, changing the vanity, and replacing the showers, tub, and toilet. Making energy-efficient updates to your bathroom can also dramatically improve the home’s appeal.
Ready to Try It?
There are many other types of home improvements that can significantly boost your home’s appeal and consequently increase the selling price. However, the above four usually have the biggest ROI.
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