Upgrading your home can make your life more convenient, bring your home up to code, or simply make you feel better about your living space. But, what home improvements add value to your home? Based on data from Remodeling Magazine’s Cost vs. Value 2018 report, we’ll dive into the typical costs of the top 5 home renovations to see if they are really worth the investment.
1. KITCHEN REMODELING
Topping our list is a remodel of the most popular room in a house, the kitchen. According to the National Association of Home Builders (NAHB), the kitchen is also the most popular room to remodel. The typical kitchen renovation can include cabinet refacing, updated appliances, new flooring and tile work, new faucets and sinks, and construction of additional kitchen elements like islands or additional power.
Kitchen remodeling costs can vary wildly depending on how complete a remodel it is. You can expect to spend anywhere from $15,000 for a minor update to $125,000 for a complete floor plan overhaul. In order to add value to your home though, keep the home renovation costs A minor kitchen remodel has a return on investment of approx. 81%. Major kitchen remodeling costs are less likely to be a home improvement that adds value, as your home’s value may not increase enough to justify the expense. The Cost vs. Value report clocks those in at about 53-59%. return on investment.
2. BATHROOM REMODELING
Bathroom renovation projects are currently experiencing a boom in home renovation interest. Homeowners are upgrading their bathrooms to have a spa feel, possibly removing bathtubs, moving toilets into separate stalls, adding sound systems, and installing beautiful tile work. A bathroom project is also easy to acquire home improvement financing, as the returns on investment are in the range of 102%. By comparison, a major bathroom upgrade, which may include floorplan expansion or fixture relocation, has a return on investment of 93.2%.
Bathroom remodeling costs depend on the size of the bathroom and the type of upgrades you want. On the low end of the scale, expect to pay about $7,000 for a cosmetic overhaul. At the upper range, about $60,000 for complete redesign. An upscale master bathroom can be the selling point of a home, so get home improvement financing and really go for it.
3. ADDING VALUE TO YOUR HOME WITH A DECK OR PATIO
Not only does this make a lovely summertime relaxation spot, but it also adds value to your home in a real way. Adding a deck or patio increases the square footage of your home. This will also increase your property taxes, so keep that in mind when designing your home improvement project. A deck can run you anywhere between $9,000 and $17,000, depending on the size and the material constructed with. However, the return on that investment runs into the 80%. So, building a deck is a home improvement that adds value as long as the deck is well maintained throughout the life of your home.
4. EXTERIOR AND LANDSCAPING
Home renovation costs that include upgrading the outside of the home can improve your chances selling the property later. Improving the “curb appeal” adds value to your home and its perceived status within the neighborhood. Relatively minor changes can make a big difference, such as paint, adding shutters, or upgrading the doors or windows. These costs can be relatively small; on the low- end, a few hundred dollars for paint. Sod costs about 30 to 35 cents a square foot, so a 5,000 sq. ft. yard would cost about $1,500 to sod. Remodeling costs for larger changes can be as high as $15,000 if you want to create a different physical landscape. The larger the expense, the less likely you will add value to your home. Keep the costs down and you may recoup the expense at a return on investment rate of about 90-98%. Spend more on those improvements and it drops to the 50-60%.
5. ADDING A MASTER SUITE
Think twice before adding another bedroom to your home. While it may seem that adding to the Master bedroom may wow a potential buyer, it is actually less likely to do so. It may also be harder to secure home improvement financing as the total return on investment is only about 48-56%. That is because the average remodeling cost of a master suite addition is roughly $65,000, but can balloon to $123,000 for a luxury build. If you want to change the master bedroom for personal reasons, then do it. If you want to add value to your home, you may want to consider redoing the master bathroom instead.
Most major home improvement projects need financing. Using a home equity line of credit is a good way to finance remodeling costs without tapping your savings. Understanding your home’s current equity will be the first step to figuring out which home renovation costs will increase your home’s value. Use this link to find out how to calculate your home’s equity.