Many homeowners consider interior renovations when they are preparing to sell, or settling into a new home in need of some remodeling. These functional and design upgrades have the benefits of adding value to your home and making it feel more livable and comfortable. According to a recent study by the National Association of Realtors, approximately 70% of homeowners who have completed a renovation project feel a huge sense of accomplishment and increased enjoyment of spending time in their home.
There are two types of renovations that continue to top the list for return on investment: kitchen and bath remodels. Given that people spend a great deal of time in these rooms, many real estate agents will tell you that these types of remodels can make or break a sale of a home. It’s important to research your market and comparable homes in your area to decide if renovation makes financial sense for you, and at what level.
Factors to Consider
Location in a major factor in the percentage of financial return you can make from a kitchen or bath remodel. For example, if your home is in California, a minor kitchen remodel can yield the highest return on investment in the nation, at 92.9% on average as reported by Remodeling Magazine’s Cost vs. Value Report for 2018. They also reported that a mid-range bathroom remodel in California is also a sound investment, as it offers the highest ROI in the nation at 87.7%.
Timing is also important. Even if you are not recouping 100% of the construction and material costs, you can factor in the value of experience of the upgrades for as long as you choose to enjoy them. For instance, if you have just moved in and a renovation isn’t immediately needed, you can schedule it to occur a few years before you plan to sell. In this way you can enjoy the new space without the need to significantly upgrade it again before putting it on the market.
What kind of renovation?
Depending on your budget, you can choose to keep it simple or embark on a full renovation. For both kitchens and baths, modest value can be added by refinishing existing cabinetry, upgrading lighting fixtures, and replacing hardware and plumbing trims.
For more of an upscale feel in kitchens, consider replacing cabinets and appliances and adding natural wood or stone flooring and stone countertops. In baths, walk-in showers have become increasingly popular. However, if your home only has one bathroom, a wiser investment would be to add a secondary bathroom to increase value.
Often it makes sense to change the footprint of your bath or kitchen to increase the square footage. This may enable you to add a double vanity or a soaking tub in the bathroom or to create an open concept kitchen you’ve always dreamed of.