How to get the Best ROI From a Home Remodel

How to get the Best ROI From a Home Remodel

When homeowners choose to remodel their home, they usually do so to enjoy more spacious or luxurious living conditions or to improve the value of the home for an upcoming or future purchase. It is important to weigh the costs of the remodel versus the benefits. Many homeowners don’t consider this viewpoint or they do so inaccurately. They may get excited about the increase in their home value and then learn later that the increase was not nearly as high as they expected or that they actually lost money. Read on to learn how to prevent this.

How to get the Best ROI From a Home Remodel

You have to consider several factors including:

  • Market
  • Home values in your neighborhood
  • Remodel costs
  • Your home’s age and current value

Market

If the market is running high, homeowners should consider doing projects that don’t take up most of their remodeling funds. Consider kitchens, a popular choice for remodeling. A major kitchen remodel is only returning 59 percent of what is spent, while a minor remodel is returning 81.1 percent. Likewise, adding a patio to your home will only net you 47.6 percent of your investment while adding a wood deck will return a whopping 82.8 percent. You can see more examples in this CNBC article.

Age of the Home and Neighborhood

Also consider your home’s age and neighborhood values when determining what level of remodel you choose. If your home is older, you may might lean more toward a major remodel, as long as you don’t overdo it. This is because upgrading an older home is a better investment than upgrading a newer home.

Most home exterior remodels will increase your home’s value, if the curb appeal is lacking. Exterior upgrades make your home more appealing to buyers, after all, first impressions are key.

The neighborhood should be a deciding factor in regard to what types of upgrades you give your home. If you live in a modest neighborhood with mostly bungalows and ranches, then adding on an upper level isn’t where you should spend your money. If you live in a high-end neighborhood with large homes, then you may learn more toward high-end fixtures and more showy remodels.

Which Rooms to Remodel

Bathrooms and kitchens are some of the most popular interior upgrades, and for good reason. Buyers don’t want to have to remodel these rooms, so they’ll appreciate it already being done for them. And if you aren’t selling, kitchens and bathrooms are the rooms people usually feel the most need in for upgraded features, more space, and more comfort. So definitely put kitchen and bathroom remodels higher on your priority list.

If you have many rooms you might want to remodel, make a plan outlining what needs to be completed in each room and then prioritize the projects based on your needs and wants. Then contact an expert home remodeling company for estimates to help you determine where you should spend your investment dollars first for the best ROI from a home remodel.

Upgrading your home will bring you value, as long as you consider the key elements outlined in this article.

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