With more people spending time at home this past year, many families have decided to tackle some long overdue home projects and renovations. But how do you know what projects to tackle that will give you the most return on your investment or increase your home’s property value the most? Therein lies the biggest debate with your budget!
Having a new modern kitchen sounds great, but should you just paint your cabinets and install new countertops vs. a full remodel? Should you finish attic space or basement space? Do hardwood floors add a lot more value than tile or a vinyl plank? These are all things you should know before undergoing costly and time-consuming remodels if you are looking to increase your resale value.
A kitchen remodel – yes, you should do a kitchen remodel. According to a report from the National Association of Realtors, a sleek, new kitchen with updated appliances will appeal to buyers and increase the value of your home.
A new kitchen can be costly with an average estimate of $68,000 for a full remodel. Most sellers recoup about 59% of their investment. Upgrading your kitchen can be a little more cost-effective vs. a full remodel at an estimated $38,000. Most sellers recoup about 52% in the resale value.
What about bathrooms? A full bathroom remodel can cost as much as $35,000 for a full 4-piece bathroom. Homeowners typically recover about 57% of their investment. If you are thinking of adding a new full bathroom, plan to spend about $60,000 and receive about 50% back.
Should you upgrade the master suite? Maybe – about 2/3rds of homeowners who did major master suite upgrades said they enjoy their home more and have more of a desire to spend additional time in that area of their home. However, you could end up spending over $100,000 on a master suite renovation and only recoup about 50% of your investment.
Where should additional square footage be added? When it comes to choosing between an attic or a basement, it’s almost always cheaper and more profitable to finish a basement. Depending on the size and finishes, a basement finishing project could cost upwards of $40,000, but it can recoup 64% of its value back into the home. An attic is usually most costly and only 56% of the value is recouped.
What’s the most lucrative home improvement? While it usually doesn’t add much glamour to the home, a new roof is one of the best investments you can make. Many homeowners recoup 100% of their investment in resale value!
New flooring is another great investment that can add some beauty and design elements to your home. New wood floors can see a 100% return on investment, while even refinishing floors can create a break-even scenario.
Tackling smaller projects can also be worthwhile. In fact upgrading insulation is a fairly inexpensive job that gets the homeowner about 80% of their investment back. New doors, including garage doors, can be cost effective to tackle and see about a 95% return on investment.
If you are considering selling your home soon, it’s important that the updates you make get you a good return on your investment. If you aren’t sure which projects make sense to tackle, talk to a local Realtor. If you need help financing your projects, give us a call – we offer several Home Equity options that you may be able to take advantage of.
Vice President, Senior Mortgage Lender
NMLS MLO ID: 532621