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Should you renovate your home before selling?



Which home renovation is worth splurging on depends on your goals for the project and your budget.

If you’re going to maximize the value of your home for later resale, consider investing in low-cost projects with a high return on investment. On the other hand, if your goal is to create a space that is customized to your unique lifestyle, you can consider projects dedicated to increasing the comfort and utilization of your living space.

Which home renovation is worth the investment?

Investment-worthy renovations are those needed to make your home ready for potential buyers. Depending on the current condition of your home, this could mean completing essential repairs or refreshing the home’s overall aesthetic for a more timeless look.

“Buyers want to make sure that when they buy a home, they won’t have to pay extra,” says Jill Franks, top interior designer and project manager at freelance model—a California-based home improvement company dedicated to maximizing property value.

There are a number of home improvements to consider that will increase the value of your home, but finding an investment with a high return on investment will help you determine the best use of your budget.

Build a supplement

Add a new bathroom

Average costs: 80,000 USD

The average value: 50,000 USD

Refundable investment: 63%

The total cost of the project will depend on whether you want to add a full bathroom, including a bath or shower, or a half bathroom without. Depending on the number of bathrooms your home currently has and the bedroom-to-bathroom ratio, adding an extra bathroom can make your home more comfortable if you’re planning to stay for a while or increase its value. property—especially if your home currently has only one bathroom.

The cost also depends on whether you add square footage to your home through additions or gaps in your existing floor plan. Franks says: “If you can find a way in your existing floor plan and the additional bathroom adds significant value to your property’s price, it could be worth the investment.

Add a new bedroom

Average costs: $172,500

The average value: 100,000 USD

Refundable investment: 56%

Similar to adding a bathroom, according to Franks, adding a bedroom should only be considered if it increases your comfort or the property value is at least twice the investment cost. This is due to the time it takes to apply for a permit to build the add-on and complete the project.

It is also one of the most expensive home renovations a homeowner can make. However, if a homeowner can find more space in their existing floor plan to add an additional room, they can cut the cost and time of the project, which could make this investment less expensive. valuable.

Renovate your kitchen

Average costs: 80,000 USD

The average value: 60,000 USD

Refundable investment: 75%

A major kitchen remodel often involves tearing down existing cabinets and countertops and replacing them with an updated floor plan. This is more expensive than minor repairs, which can be as simple as a fresh coat of paint and hardware updates.

If you’re going to put your home on the market, a small update could be just what your kitchen needs to freshen up the space so potential buyers can visualize they’re inside. One thing to keep in mind when selling, however, is to avoid becoming emotionally attached to your personal aesthetic and to stick with timeless colors and finishes that potential buyers can imagine. they will live in the house for a long time.

Renovate your bathroom

Average costs: $35,000

The average value: 25,000 USD

Refundable investment: 71%

If your bathroom is limited in terms of space, you can increase its functionality by renovating the existing layout. This maximizes your existing square footage and is more cost-effective than building an extra bathroom from scratch. Refreshing your existing space can also add a unique flair to your home, making it stand out from other listings on the market, says Franks.

Renovate your basement

Average costs: $57,500

The average value: $49,250

Refundable investment: eighty six%

If you have an unfinished basement, you can significantly increase the value of your home by refinishing the space. It increases the usable space in your home and can provide space to add an additional room in your home.

This is also an opportunity to add an additional accommodation unit, such as a mother-in-law suite or rental unit. This project is becoming more and more popular during the pandemic as many people need a separate space for their family members to move in or are looking for an additional source of income to supplement their income. , Franks said.

Refurbish your home’s exterior

new roof

Average costs: $12,000

The average value: $12,000

Refundable investment: 100%

New garage door

Average costs: $2,000

The average value: $2,000

Refundable investment: 100%

New vinyl siding

Average costs: $18,300

The average value: $15,000

Refundable investment: 82%

New fiber cement board

Average costs: $18,600

The average value: $16,000

Refundable investment: eighty six%

Replacing your roof and partitions often offers a great return on your investment as they are necessary repairs and can last for decades. You can also increase your home’s overall energy efficiency, helping to reduce your utility bills. Turning off your garage door not only adds curb appeal, but it also gives you the opportunity to incorporate smart technology that allows you to remotely close your garage door if you forget.

“Buyers today want to walk into a home and feel like, even if it’s not their dream home aesthetically, they’re walking into a home they actually have,” says Franks. can live for a while before having to spend money. .

Replacing doors and windows

New steel front door

Average costs: $3,150

The average value: $2,000

Refundable investment: 63%

New fiberglass front door

Average costs: $3,500

The average value: $2,100

Refundable investment: 60%

new vinyl window

Average costs: 30,000 USD

The average value: 20,000 USD

Refundable investment: sixty seven%

New wooden window

Average costs: $48,000

The average value: 30,000 USD

Refundable investment: 63%

Replacing your front door can improve the overall look of your home, but it’s not a wise investment because buyers often focus solely on whether the front door will work, says Franks. .

If you have the budget, consider replacing your windows instead. Energy efficient windows help insulate your home and prevent extreme weather conditions from entering. Medium, replace old windows reduce your energy bill by 12%—that’s good news for potential buyers and will increase your overall property value.

Big improvement vs small

Major improvements: Implies a major or significant change to the structure of your home. Major renovations and remodeling are often more expensive than minor updates due to the scope of the project and the materials used.

Small improvements: Focus on aesthetic changes to the existing structure of your home. Small renovations can be more cost-effective than major renovations because they often focus on changing small details to refresh the space, such as replacing hardware or floors.

Carried away

Home improvement projects like replacing your roof and partitions are a surefire way to recoup almost all of your investment. However, other projects—such as adding an extra bathroom or bedroom—may cost you more to complete than buyers are willing to pay.

When considering where in your home you want to invest your money, you should first consider the goals of the project. “The idea of ​​renovating is, if you are in that house, make it your dream home,” says Frank. “But, if you sell it, it’s to maximize the money in your pocket.”

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