Transforming your home can be a thrilling journey, one that can drastically improve the aesthetics and functionality of your living space. However, the paramount consideration for many homeowners is the return on investment (ROI) on their home improvement projects. After all, if you're spending your hard-earned money, it's only logical to hope for a good return when it comes time to sell.
According to Renofi, the national average ROI for home remodeling projects is around 70%. To aid in making the best choices for home improvements, this article will provide insights on the most profitable projects and factors that can impact your home's resale value.
Average Return on Investment by Home Improvement Project
The ROI of home improvement projects varies significantly, influenced by a myriad of factors, including the scale of the project, the quality of the materials used, and the labor costs. Below is a summary table of several popular home improvement projects and their average ROI percentages, according to Remodeling by JLC.
| Proje | Avg. ROI % |
|---|---|
| Midrange Bathroom Remodel | 60.1% |
| Minor Kitchen Remodel | 72.2% |
| Major Bathroom Remodel | 54.8% |
| Major Kitchen Remodel | 57.4% |
| Garage Door Replacement | 93.8% |
| Wood Deck Addition | 65.8% |
| Replace Windows | 68.6% |
The Highest-Performing Home Improvements
The Kitchen: Small Changes, Big Impact
A kitchen remodel is one of the most impactful home improvements you can undertake. A minor kitchen remodel, which may involve updating cabinet fronts and replacing appliances with more modern and energy-efficient models, can offer a respectable average ROI of 72.2%. It's often surprising how much of a difference simple changes can make.
Give Your Walls a Fresh Look
A fresh coat of paint can revitalize any room in the house. It's one of the easiest and most cost-effective home improvement projects, yet it can dramatically transform your space, enhancing its appeal to potential buyers.
Make the Most of Your Hardwood Floors
Hardwood floors are a cherished feature in any home. If your home has them, consider a refinish to restore their natural beauty and elegance. This project not only enhances the aesthetic appeal but also significantly contributes to your home's resale value.
Mirror, Mirror, on the Wall
Adding new mirrors, especially in the bathrooms and bedrooms, can make your rooms feel larger, brighter, and more appealing. Mirrors are a stylish, functional addition that potential buyers will surely appreciate.
Change the Hardware
Swapping out outdated hardware for new, sleek versions is a minor project that can yield a significant visual impact. From cabinet knobs to light fixtures, updated hardware adds a modern touch to your home.
Enhance Your Home's Exterior
First impressions matter, especially when it comes to selling a house. Therefore, sprucing up the exterior of your home can greatly increase curb appeal. Consider exterior improvements like power washing, repainting, or replacing the front door.
Make the Front Yard Flourish
Garden landscaping, particularly in the front yard, boosts curb appeal like other projects. Planting trees, shrubs, and flowers can transform your home's exterior into a beautiful, inviting space, enticing potential buyers right from the driveway.
Utilize Every Inch
Creating functional spaces throughout your home is an effective way to maximize its potential. Whether transforming an unused corner into a cozy reading nook or optimizing storage in your kitchen, making every space work can add more value to your home.
Don't Forget the Basement and Attic
A dark and dingy basement or an unused attic isn't just wasted space—it's wasted potential. Finishing these areas adds usable living space and increases the total square footage of your home, making it more appealing to buyers.
Upgrade the Bathroom
Bathroom renovations, both major and minor, can offer a substantial return on investment. From a complete overhaul of the master bathroom to a simple update of fixtures in a minor bathroom, well-executed bath remodels can significantly increase home prices.
Factors That Influence Resale Value and ROI
Local Living Conditions
The area in which a house is located greatly impacts its value. Factors such as school quality, amenities, and proximity to urban centers can significantly influence potential buyers' interest.
Geographic Location
The region your home is in can significantly affect its resale value. Certain improvements might have a higher ROI in one area than another due to local preferences and climate considerations.
Housing Market Fluctuations
When you sell your house, the state of the real estate market can significantly affect its value. Market trends can be unpredictable, but understanding them can help you decide the best time to sell.
Selling Timeframe
Your timeline for selling can also impact the ROI of your home improvement projects. If you plan to sell shortly, it's wise to focus on projects that will have immediate appeal and provide a high ROI.
Unforeseen Expenses and Problems
Unexpected issues can arise during the renovation process, such as hidden water damage or outdated electrical systems, which can increase project costs and lower your ROI.
About Carol Lee
Renowned for her expertise in luxury real estate, Carol Lee garnered the attention of the Orange County Register's readership in 2019, earning her the title of #1 Luxury Real Estate Agent. Her reputation as a trusted real estate advisor resonates with her community, with voters from five Newport neighborhoods naming her their favorite realtor in 2018 and two Newport neighborhoods repeating the honor in 2021.
Having worked at IBM and co-founded a successful software company before her 18-year real estate career, Carol brings a wealth of marketing and management experience to her work. With the support of her in-house, tech-savvy creative team, she leverages this background to provide top-notch service to her clients.
Offering her services through the Carol Lee Group at Compass, Carol promises a smooth and successful transition for those considering a move to Coastal Orange County. If you're looking to buy or sell a home or have any questions about the Newport Beach real estate market, contact Carol Lee today.
