A common conversation I have with clients and home owners revolves around which renovations and home improvement projects to focus on, and which ones have the best return on investment. What upgrades are worth focusing on for the sake of resale? Which projects will reap the highest payout? Many factors go into these decisions, including the long term plans of a homeowner, the location and price point of the property and even overall economic and real estate market conditions. For example, it may not be worthwhile to complete certain renovations if a homeowner intends to move on before they can see the best return on their investment, and over-improving a property relative to its location or resale value may not be worthwhile based on what it could sell for down the road.
A recent blog post from Re/Max outlines further insight on this topic. A few key notes are summarized below to help you begin prioritizing how to invest your dollars for the best impact on your home’s appeal and resale value.
- Fresh paint: 60% return on investment, 10-15K based on a 2000SF home.
- Structural improvements (replacement windows, roof shingles): 75% ROI, $8-15K
- Doors: 50% ROI, $2500/door (exterior), $250/door (interior)
- Kitchen refresh: 75-100% ROI, $3000+ depending on components (think: counter tops, appliances, painted cabinetry)
- Bathroom: 62% ROI, $5-15K
- Flooring: 100% ROI, $6-8/SF (hardwood), $3-5/SF (laminate)
The National Association of Realtors also published a report recently (linked HERE) that speaks to home upgrades and their recovered value. Here are some insights from their study:
A few statistics about home renovations to consider:
- 69% of homeowners reported greater enjoyment in their home following their improvements
- 35% of homeowners suggested that they have improved function and livability in their homes as a result of their upgrades and renovations
- 35% of homeowners hired contractors to complete their home renovations
- 28% of homeowners hired professional labourers but purchased the materials independently
- 22% of homeowners opted to complete the entire job on their own
Following their research, the list of home improvements they outlined are based on an average sized home in the US (2495SF) with no hidden defects or complications. Obviously, the associated costs will vary depending on quality of products used, but this provides a general overview of what can be expected.
- Hardwood Floor Refinish: 147% ROI, $3400 cost
- New Flooring: 118% ROI, $5,500 cost
- Insulation Upgrade: 100% ROI, $2500 cost
- Basement Finish: 86% ROI, $57,000 cost
- Closet Renovation: 83% ROI, $6000 cost
- Complete Kitchen Renovation: 75% ROI, $80,000 cost
- Bathroom Renovation: 71% ROI, $35,000 cost
- Kitchen Upgrades: 67% ROI, $45,000 cost
- New Roof Shingles: 100% ROI, $12,000 cost
- New Garage Door: 100% ROI, $2,000 cost
- New Siding: 84% ROI, $18,500 cost
- New Windows: 65% ROI, $39,000 cost
- New Front Door: 61% ROI, $32,000 cost
If you’re considering a home improvement and are unsure of whether it’s worth your while, or even what to focus on, let’s chat. I’d be happy to share insight on the value of your home renovations and which projects may have the best bang for your buck. I can also point you towards trusted contractors who can assist in making your dreams a reality so you can either enjoy your space optimally, or prepare it for the market and capitalize on your investment. Happy renovating!