One of the best ways to increase the value of your home over the years, and (arguably) one of the best parts of being a homeowner to begin with, is being able to complete projects that add to the overall functionality and enjoyment of the space, as well as ensuring that you will see that money again when it comes time to sell. Whether you are planning on rolling up your sleeves and DIYing, or keeping those sleeves neatly pressed and calling the pros, it would behoove you to know which projects (typically) produce the most return on investment, or ROI. Basically, how likely are you to recoup the cost spent in sprucing up your space?
#1 . Minor bathroom remodel
If you spend nearly any time at all watching any of the home improvement shows on tv today, you will likely hear that there are two rooms that sell a house, bathrooms and kitchens. This being the case, it makes sense that the two rooms that consistently show the biggest return on investments would be, you guessed it, bathrooms and kitchens. While a major bathroom renovation might include changing the layout of the room and moving/adding plumbing, for a minor remodel, we are only seeking to update the space. According to HGTV, if you were to replace the bathtub, tile surround, floor, toilet, sink, vanity and fixtures, you would be looking to drop about $10,500. While that might initially sound like a good chunk of change, the average amount you could expect to see back at resale would be around $10,700. This means that an average, minor bathroom remodel can net a thrifty homeowner a whopping 102% return on investment.
#2. Minor Kitchen Remodel
In 2015, The National Association of Realtors, in their Remodeling Impact Report listed kitchen remodels/upgrades as both the project most attractive to buyers and the project most likely to increase property value. To be clear, when we are discussing the maximum return on investment, that does not necessarily mean that the more you spend, the more you will get back. That being said, for the purposes of maximizing return, we are talking about a minor kitchen remodel, not a complete overhaul. While it can be rather tempting to strut in with your sledgehammer and take down a wall or two, that may not be the best plan. If you are building your dream kitchen, and are not worried about resale, or seeing your investment returned to you in the near future, then by all means, whack away. However, if you are looking to add value to your home without a huge investment, or are thinking of selling sometime relatively soon, then an approach with a bit more restraint is advisable. There are a few major elements to be considered in a kitchen space:
Appliances- New appliances don’t necessarily have to be the top of the line, but they should match and have a cohesive look. Stainless is always a great option, because it has a modern look and feel, and is something that many buyers say that they are looking for when purchasing a home.
Cabinets- If you are feeling particularly spendy, or if you are looking to change the layout of your kitchen, then custom cabinetry may be necessary. However, if you plan on a more modest renovation, simply changing out the existing faces of your cabinets, or resurfacing the existing fronts can be far more cost-effective and pack just as big of a punch.
Countertops- Consider your options, depending on the amount of surface area, and the opulence of your taste, one could easily go a bit crazy and spend a small fortune on upscale options like marble or granite. However, if you are concerned with your ROI, you would be better advised to stick with more affordable, but just as attractive materials.
Finishes- Little things, like drawer pulls and other hardware can make a substantial impact in making a space look more modern and high-end, without too much money spent. Try to match colors and finishes so that the whole room feels thoughtful and cohesive.
According to Zillow, the average minor kitchen remodel costs the homeowner around $21,000, and, on average, they can expect to see about $17,000 ROI. This puts a minor kitchen remodel high on our list of projects with a return on investment of around 81%.
#3. Home Office
Now, go with us on this one, as it is a bit of a speculation. Prior to 2020, a home office seemed a bit unnecessary in the mind of many homeowners. The office was for work, and the home was for living. Simple. However, when our work and home lives collided in the collosal way that they did in the early months of last year, that thinking began to shift. While so many Americans sat through remote meetings at dining room tables, shared by spouses and any number of offspring, all desperately shouting through overly-taxed internet connections, the idea of a dedicated work space within the home seemed a bit more important.
With so many businesses making the decision to keep employees working from home for the foreseeable future, and so many schools engaging some form of a hybrid learning model, home offices are becoming more and more of a necessity. The benefit of converting a spare bedroom, or attic or basement space to a home office is that, if you choose to list your home, it can (so long as it meets all building codes) be listed as a bedroom (which will almost certainly increase the amount that you can list your home for) and potential buyers can envision it however will best suit their situation, widening your buyer pool. If your current home does not have the space available to convert existing square footage, you could always consider the increasingly popular idea of adding an outbuilding to your property to serve as an office. This sort of addition has skyrocketed in popularity as of late, and can serve as a cost-effective solution for many homeowners. You can read more about how to plan for this sort of project here. Since this is such a recent shift in thinking, the exact amount that a homeowner could expect to see is still a bit unclear, however, recent studies indicate that adding a home office could increase your home value up to 10%.