Home Renovations: Do This, Not That to Increase Your Home’s Value

Your home is worth what someone is willing to pay for it. That’s why your real estate agent looks at homes in your area that have recently sold to help you set an asking price. The comps give you a glimpse of what a buyer has already paid for a home like yours.

This is important to remember when you consider home renovation projects. Upgrades are great, but they are even better when they raise your home’s value. Before you decide to tear down a wall, replace a bathtub, or install new flooring, find out what it will cost and what you can expect to get back later when you sell the home or decide to add it to your portfolio of investment properties.

Projects That Increase Your Home’s Value

If you’re planning to put your home on the market, choose your renovations wisely. Aim for the projects that buyers are willing to pay for. These are the ones that increase your home’s value enough to cover the cost of the investment.

Do: Add a Bathroom

A new bathroom doesn’t require a massive amount of space — you just need 18 square feet for a half bath and 30 to 35 square feet for a full bath. Yet, it can boost your home’s value and bring you a return on investment of 81% to more than 100%. Build the new bathroom in a closet or unused corner to avoid the expense of building an addition to your home.

Do: Install a New Door

One of the simplest renovation projects on this list also happens to top it. Installing a new garage door or front entry door gives your home an instant lift and boosts curb appeal. Homeowners who replace an aging garage door can see a return of 94% on the investment, while those who install a steel front entry door typically see a return of 65%. Add windows and smart control features for an added bonus to attract buyers.

Do: Build a Deck or Patio

Southern California residents know how to enjoy the sunshine and warm weather. That’s one reason outdoor living spaces are so popular here. This addition can bring you a return between 63%and 90% of your investment. The cost of this project will vary depending on factors like size and materials. Add-ons like built-in seating or an outdoor kitchen increase the total cost, but they don’t always increase the home’s value. Keep it simple if you have resale value in mind.

Do: Remodel the Kitchen (Within Reason)

A minor kitchen remodel — slightly more than fresh paint and new appliances — can pay off when you’re ready to sell the house. It’s a practical renovation that keeps the kitchen from looking dated, something buyers don’t particularly like to see. This project typically includes refacing the cabinets, covering the old floor, and installing new fixtures. You may get an 87% return on your investment when you focus on the heart of the home.

Skip These Renovation Projects

Bigger isn’t always better when you’re comparing the cost of a renovation to how much the end result helps your home’s appreciation. These projects have the potential to completely transform your home, but they might not be worth it.

Don’t: Overhaul the Bathroom

Although adding a bathroom can boost your home’s value, a major bathroom remodel may not bring the same return on investment. You could get a 60% return on the investment with a bathroom facelift that includes replacing the sink, vanity, and toilet as well as installing new tile. The problem with this type of renovation is the cost, which may not be as easy to recoup compared to other projects.

Don’t: Upgrade the Entire Kitchen

A mid-range kitchen remodel can easily top $75,000 to replace the appliances, cabinets, counters, and floors. However, a 57% return on the investment may not be worth the cost. Even worse, a deluxe kitchen can look out of place if the rest of your home doesn’t have similar quality and detail. If you over-renovate the room, you stand to lose even more money.

Don’t: Add Specialized Spaces

You may have needed a dedicated home office, but it doesn’t appeal to everyone. It takes up usable space in the house that could be used for other purposes. In fact, most buyers don’t see more than a 54% return on the investment of creating a home office. Other specialized spaces, like wine cellars and home theater rooms, elicit similar responses. The audience for these types of rooms is limited, so their presence may turn off buyers.

Don’t: Add a Master Suite

A master suite seems like a great idea. It gives parents a place to escape. It adds to your home’s living space. It’s a great selling point for rental property. But it also has a relatively low return on investment. You may only be able to recoup between 48% and 55% of what you spent to build the addition.

OpenAiRE’s Interior Design Services for Homeowners

Putting your house on the market isn’t the only option. Your renovation project may give the property just what it needs to be successful in the short-term rental market. Reach out to our OpenAiRE team to learn more about our property management and interior design services. Let us show you how we make second home ownership effortless.