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Adding Value To Your Home Through Home Improvements
Home improvements are a big investment and you need to put a serious amount of thought into how much they will cost and budget accordingly. For people who are unsure about their long term residential plans, the decision is even tougher as they have to weigh up whether it’s worth the hassle and upheaval if they don’t end up staying there long-term. Some home improvements have a good return on investment (ROI) while others do not, and it is these two factors that should dictate what home improvements you make, if you intend on selling your home in the near future.
For example, a new bathroom addition generally has a very good ROI, as most people see a second bathroom as a necessity when buying a home these days, so it will make a good impression on potential buyers. Data shows that you can usually recoup between 80%-130% on resale when you add a bathroom to your home. On the flip side of this, property additions like indoor or outdoor swimming pools have a very poor ROI and you generally only recoup between 30%-50%, so these are best avoided if you’re moving home soon.
The guys from from HalfPrice.com.au have put together this useful infographic which should assist your decision making process. It charts some ideas that tend to consistently add value to a property; it shows how to make your options of the environmentally friendly kind and it highlights some improvements ideas that tend to not result in a positive outcome in terms of ROI.
Check it out below.
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DO HOME IMPROVEMENTS: Add Value To Your Home
It’s the fundamental question facing anyone who has ever embarked on a home renovation: How likely am I to get the money back when I sell my house? We take a look at the home improvements with the best return on investment (ROI), including some great green options, as well as the ones with the worst ROI.
The Most Valuable Home Improvement Projects
- Most people consider the kitchen to be the heart of the home, and because of this, upgrading in this area can pay off.
- You can expect to recoup 60% – 120% of your investment on a kitchen remodel.
- The style, size, and quality of the kitchen need to fit in with the rest of the house.
- Be aware that fresh paint and modern colours can go a long way towards updating the look of your kitchen, and you may not even require a full remodeling.
- Buyers tend to prefer houses where the number of bathrooms equals the number f bedrooms, so having at least two is becoming a necessity for buyers.
- You can recoup 80% – 130% of whatever you spend adding a bathroom.
- Before committing to a bathroom addition, call in a real estate agent to evaluate whether an additional bathroom makes sense for your home.
- When it comes to finding room in your house for an extra bathroom, take a look at any extra rooms or underutilized spaces.
- Outdoor living spaces have become more desirable, especially since a lot of people stay home for vacation.
- The deck’s appeal is also linked to today’s more thrift-conscious consumers, who are looking to save money by spending more time at home.
- Homeowners generally recoup 65% – 90% of their investment by adding a deck.
- The cost of adding a deck to your home varies widely. Everything depends on its size and the amount of extras you want.
- The practicality of a deck will vary depending on the weather in your areas so it is important to keep this in mind.
Reinventing the Basement/Attic
- Reinventing an area within the home is a far more prudent investment than creating a room from scratch.
- Homeowners recoup an average of 70.4% of their investment.
- Basements frequently work well as second living rooms and attic spaces can become craft rooms and game rooms.
- However, ensure that you do not overly customize the rooms as potential buyers may want to make changes.
- Simple things like keeping the paint fresh, replacing rotting wood, and getting rid of any mould will improve perspective buyer’s first impression. Buyers will check that routine maintenance has been done in your home.
- It is difficult to define ROI in this instance, but these upgrades will be cheap, and may attract a higher number of buyers.
- If you do decide that your property could benefit from a fresh coat of paint, be sure to do it before you take photos to advertise the property.
- It is recommended that you choose light, neutral colours for both the interior and the exterior of the home.
Green Projects for the Future
You may also be considering green additions to your home and these have a great ROI over a number of years. If you stya in your home you will reap the benefits and buyers will also pay extra for it.
- Old, drafty single-pane windows are a major turn off for perspective buyers. Millennials are especially touchy about this and will avoid houses without double pane windows.
- You can expect to recoup 60% – 90% of your costs on energy-efficient windows.
- It is estimated that the cost of window replacement in an average-sized home is $7,500 – $10,000.
- Check with your local government if there are tax rebates available where you live.
- If your home lacks basic insulation, and has old doors that let in plenty of hot and cold air, home inspectors working with potential buyers will include this in their reports.
- The cost is generally around $2,500 to $5,00 and it will take 12.5 – 25 years on average to recoup the expense.
- You will need to figure out where the cracks are in your home and remedy the situation accordingly.
- This will generally be around windows and doors, electrical sockets, and light switches, and anywhere ducts or wires go outside the house.
- Solar panels are one of the best ways to lower your electricity expenses and buyers will be quick to realize the benefits.
- The initial cost is around $18,000 and the average time to recoup the gains is between 6-10 years.
- Check if there are tax rebates for solar panels in your area.
- Investments in solar panels have a particularly good ROI in liberal communities.
The Least Valuable Home Improvement Projects
If you’re planning on selling in the near future, these home improvements are best avoided!
- Most people don’t need luxury home offices. Technology quickly becomes outdated so it won’t generate additional income at the time of the sale.
- The average home office renovation costs $28,000 and you will receive about a 46% ROI.
A swimming pool generally makes your house more difficult to sell. Many people, especially families with small children, do not want to buy a house with a pool.
- You will recoup 30% – 50% of your investment on a pool depending on the buyer.
- If you are remodeling your kitchen, invest in quality, serviceable appliances that appeal to many people as too much customisations turns buyers away.
- If you plan on moving soon, do not spend $40,000 on a kitchen remodel because you will not get back nearly that amount of money from resale.
- Sunrooms only add value to a specific target audience so they are best avoided if you’re planning to move.
- A sunroom generally recoups 49% – 59% of the initial investment.
- Many homeowners install luxury bathtubs, only to discover they need to invest in a larger hot water tank for the tub to work properly.
- This project can cost you thousands of dollars, and if you run into problems, the costs climb even higher, and buyers will not reimburse you for this.
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