Remodeling Your Home for the Best Return on Investment
Thinking about remodeling your home? There are many reasons you may want to do this. If you think you may sell the home or that your children might sell the home after you’re gone, you want to be sure the remodeling you do improves the overall value of the property. Before calling on home remodeling services to begin your project, it helps to know what renovations have the best return on investment. That’s not to say you shouldn’t make the changes you want, but if you’re remodeling with the intent to sell or think you’ll want to sell eventually, these updates can net you a higher price.
You’ve likely heard the phrase “kitchens sell houses” and there is some truth to that. Many people see the kitchen as the center or heart of their home, and they want to have a space that is both welcoming and functional. Updated counters, plenty of storage, and durable flooring is a must. Today, kitchens with drop ceilings, Formica counters, and small cabinets can be major turnoffs.
Doing a full kitchen remodel can be costly, but it’s money well-spent. Remodeling your home without redoing the kitchen likely won’t do much for your overall property value. One thing many people want today is a kitchen that is open to the living and dining area. These open-concept spaces can be costly to create since it often means taking down walls, but it’s a great way of adding value. Even if you don’t need to do that, changing the kitchen configuration to make it larger or more open will add value.
When allocating your budget for a home remodel, it’s a good idea to at least set aside a little money for a kitchen refresh. If you have good counters, flooring, and cabinets, you may not have to replace any of them. However, by repainting the fronts of the cabinets, switching out the hardware, and making a few other cosmetic changes, you can make the space more attractive to buyers. Even if you do need to replace cabinets, try to leave the sink and appliances where they are. Spending money to move gas or water lines can add to your budget but may not make a large difference in selling price.
The second major area of a home that tends to eat into a remodel budget is the bathroom. Stunning bathrooms can sell homes just as quickly as great kitchens do, especially if you have a master bath that has a spa-like atmosphere and plenty of space. Bathrooms do typically cost less to remodel than kitchens, so it’s easier to keep your home remodel within your budget. However, bathroom remodels also often end up without a middle ground, i.e. you either do a basic refresh while leaving the layout as it is or you do a full gut, moving water lines and walls around.
For example, a standard hall bathroom that contains a single vanity, toilet, and a shower/tub combo may simply not have the space to be reworked. You can retile the shower, repaint, put in new flooring and a new vanity, but that may be the extent of what’s possible unless you do some serious remodeling, moving walls, and taking space from the rooms on either side of the bathroom.
On the other hand, a master bathroom may have a bad layout that requires you to take it down to the studs and rebuild the space. However, this can add a good amount of value to your home and provide a good return on your investment. Changing out an outdated bathtub for a garden tub or soaker tub can be a great update. Enlarging the shower, putting in a double vanity, or moving the toilet to a private water closet are also changes that can add value and make the space more attractive to buyers.
Change the Flooring
Changing out the flooring is actually fairly easy and, when compared to redoing a kitchen or bathroom, is also quite affordable. Many buyers today are looking for hardwoods or engineered flooring that looks like hardwood. Carpet, unless it’s in the bedrooms, is typically not something buyers are looking for. By updating your flooring, you can make your home stand out and draw more attention. Consider running the same floors throughout the home or at least throughout the living spaces.
If you have the budget and want to make your flooring even more attractive, there are a few extras you can think about. For example, you can make your bathroom more attractive by installing heated flooring. You can also change how the flooring is laid out. Instead of straight planks side by side, you could have the living room flooring laid in a herringbone pattern. This gives the space a different look that many buyers like. Be aware, though, that it does cost more to lay flooring like this due to how the pieces need to be cut.
Create More Space
When planning a home remodel, one of the first things you should look at is if there’s an opportunity to create more livable or usable space. Unfinished attics and basements can be finished out to add to your home’s usable square footage. Another option is to fully convert a screened in porch or garage into a full room with insulation, HVAC, and everything else necessary for it to count as livable space.
Square footage typically translates directly into a higher selling price. This is especially true if you can increase the number of bedrooms and bathrooms your home has. If you finish off your basement by adding a closet, an egress window (a requirement for a bedroom), and a bathroom, you’ve changed what homes you’re competing against and which buyers you’re attracting. In some cases, this can add substantial value to your home.
You will want to carefully watch your budget here, though. While converting a space into usable square footage can give you a good return on your investment, building an addition to your home may not. There is a good amount of additional costs here that can quickly spiral out of control.
Updating or Adding HVAC
Some homes, especially older homes, do not have central heat and air. Unfortunately, many homebuyers will quickly move past a home that doesn’t have an HVAC unit, especially in areas like Northern Colorado where it gets very hot in the summer or cold in the winter. This is one of those remodel additions that you need to decide on when you’re starting a home renovation because it is very costly, and it means doing work in every room.
It also doesn’t necessarily increase the value of your home, but it does make it easier to sell. You may want to talk to a real estate expert before you begin such a remodel to see how much buyers value central heating and air. If you plan on living in the home for several years before selling, you may want to add an HVAC system for your own comfort.
Landscaping and the Exterior of Your Home
What does the exterior of your home look like? Do you have a nice patio you can use in the summer, or does your backyard look like it’s out of control? What condition is your fencing in? Do you have outbuildings that look like they’re in need of repair? Spending a little bit of your remodel budget to spruce up the exterior of your home and the landscaping can translate into more potential buyers.
Curb appeal is a major concern for sellers. If someone doesn’t like the look of your home, they may never walk inside it. You want the exterior, including the landscaping to look nice and inviting. You don’t have to make major changes, but just trimming up the hedges and giving the exterior a fresh coat of paint can go a long way.
Indoor/outdoor living has become more and more important to buyers, so you may want to consider adding a deck or a patio in your backyard to create an outdoor entertainment space. Both of these projects can be fairly low-cost, but they both can dramatically change your backyard.
Small Changes Can Have Big Results
Finally, don’t forget that you don’t have to make huge changes to every room during your remodel. Switching out the light fixture in your dining room, for example, can have a dramatic effect if the old fixture didn’t really light up the space. Changing the paint on the walls can also have much more of an impact than you might think. A remodel doesn’t have to be all about major construction.
If you’re looking to sell, consult with a real estate expert first to see if renovating your home is worth it. These experts know what people are looking for and can you determine what areas of your home are worth renovating. Of course, once you decide on these areas, you will also want to work with a professional remodeling company. Don’t try doing a remodel on your own, especially one on the larger side. You can actually end up spending a lot more due to making costly mistakes, renting equipment, and other costs.
If you’re going to continue living in your home for several years or more, you may still want to look at where you’ll get the best return on your investment. However, you’ll also want to put your money in the places that make sense for you. If you don’t cook much, you may not necessarily want to create an amazing kitchen, so you may have more to put into the bathroom. It’s all about creating your dream home.